The rebounding Manhattan office market just got another dose of strong medicine.
Memorial Sloan Kettering Cancer Center is buying more than half of the Lipstick Building for approximately $300 million from owner SL Green, The Post has learned.
The surprising deal might be the evolving commercial scene’s most “out-of-the-box” transaction since Touro College leased a big chunk of Three Times Square in January.
It’s good news for Midtown, where traditional tenants in finance and law have either shrunk their footprints or moved to the Far West Side or Downtown. But the overall Manhattan market saw its largest leasing volume in August since December 2019, as The Post reported.
MSK’s 414,317 square-foot commitment is not a lease but a condominium purchase. But it will have the same effect of taking a big block of office space out of Manhattan’s “available” category when the sale closes by the year’s end. Publicly traded SL Green declined to comment.
The deal seemed to come out of the blue. No word of negotiations had leaked from either side, remarkable for such a large transaction at a high-profile location.
Memorial Sloan Kettering won’t be moving beds into the tower at 885 Third Ave. at East 53rd Street, but rather plans to use its floors for research and administrative offices. It reflects the trend of medical institutions gobbling up space distant from their traditional hospital campuses stretched out along York Avenue on the Upper East Side.
SL Green will continue to own the Lipstick tower’s remaining 218,796 square feet which are nearly 92% leased, according to sources. Since assuming full control of the tower in 2020, where it’s held an interest since 2007, the landlord has begun repositioning it with new state-of-the-art amenities and infrastructure.
Newmark teams represented SL Green and Memorial Sloan Kettering.
SL Green, the city’s largest commercial landlord, holds interests in 64 buildings totaling 34.4 million square feet. Its signature properties include One Vanderbilt, One Madison Avenue, 1185 and 1350 Sixth Ave., and 280 Park Ave.