After Citibank merged with Travelers in 1998, it inherited the leases on the buildings at 388-390 Greenwich St. In 2007, it purchased them from a Smith Barney Trust for $604,546,041, and immediately sold them to SL Green Realty Corp. for $1.575 billion while leasing them back through 2020 with three 10-year options.
When word got out that Citibank was weighing all its lease options and consolidating into fewer properties, many building owners reached out to win them over.
The CBRE team of Robert Alexander, Michael Geoghegan and Andrew Sussman weighed alternatives that included new towers at projects like Manhattan West, Hudson Yards and the World Trade Center. In particular, Larry Silverstein worked hard to get the bank to agree to become the anchor tenant for a new 2 World Trade Center.
But in the end the CBRE brokers worked out a deal with SL Green Realty Corp. and partners Ivanhoe Cambridge for Citi to remain in 2,634,670 square feet at 388-390 Greenwich St.
Public records show the deal worth $417,277,960 at 388 Greenwich, and the smaller 390 Greenwich, which was pegged with a value of $170,685,913, were both recast from the 2007 lease. The first term runs to 2020, but now has several complicated renewal options that can extend the leases to November 2062.
There are rights to have a mortgage on the leasehold, a right of first offer and an option to purchase the two buildings between Dec. 1, 2017, and Dec. 31, 2020.
There are also extensive signage and other branding options that can include flags and kiosks and use of the roof so long as the company leases the entire building.
The complex transaction took over 18 months because of its size, the infrastructure needs and the competing offers that were all being discussed and negotiated at the same time.