Citigroup has found a buyer willing to ante up $1.575 billion for its iconic downtown office complex once marked by a huge red umbrella.
SL Green Realty will hold a majority stake in the 2.6-million-square-foot complex, while Canadian real estate investment firm SITQ will own 47.5% of the two buildings, at 388-390 Greenwich St.
The deal works out to nearly $600 per square foot, and showed the Manhattan office market is still strong, said experts.
"It's a great sigh of relief for the market that Manhattan is seeing billion-dollar sales again," said Dan Fasulo, of Real Capital Analytics, which tracks major deals.
"The Manhattan commercial real estate market is very hot."
SL Green, which owns several Manhattan office buildings as well as liberal leaning talk radio network Air America, is headed by Stephen Green, brother of onetime mayoral candidate Mark Green.
Citigroup will stay in the buildings, which houses its investment banking arm. The buildings, a 40-story tower and a connected 10-story structure, were the former Travelers Group headquarters, which for years had featured a big red umbrella in front of the entrance.
Citigroup and Travelers merged in 1998, then the bank sold the Travelers property and casualty operation in 2002, and its life and international business in 2005.
The nation's largest bank has been beset by a sliding stock price, a top managements shakeup and steep losses triggered by investments in subprime mortgages.
CEO Chuck Prince was ousted amid the problems, and the bank is currently headed by former U.S. Treasury Secretary Robert Rubin and Win Bischoff, head of European operations.
The sale of the complex is part of a $4.6 billion cost-cutting plan annoucned in September.
Citi's stock has tumbled more than 40% this year, wiping out $108 billion of market value. It was down 24 cents to $33.06.
Last week the bank sold $7.5 billion of preferred stock to a fund controlled by the ruling family of Abu Dhabi to shore up capital. The deal will make the fund Citigroup's biggest shareholder by 2010.Citigroup sale shows market still 'very hot'
