NEW YORK - New York office landlord SL Green Realty Corp (SLG.N) on Friday will become the owner of a 21-story downtown office next to the World Trade Center site, following a foreclosure auction after the prior owner, Sapir Organization, defaulted on the mortgage.

With the only bid -- the $10,000 minimum -- SL Green wins the right to take over 100 Church Street and assume the $145 million mortgage. The building is more than 50 percent vacant.

SL Green, a real estate investment trust and one of the largest New York City office landlords, had $85 million invested through the purchase of three mezzanine loans, according to a source close to the deal. The transaction is subject to completion of closing documents.

The auction allowed SL Green to take over Sapir's equity position in the building. Sapir bought the building in 1997 and defaulted when the mortgage came due on Aug. 7, 2009.

SL Green and its then-lending arm Gramercy Capital were the lenders of two $30 million and one $25 million mezzanine loans. The fourth mezzanine loan, of $25 million, was purchased by Prudential Real Estate Investors and will be wiped out.

The transaction was the most recent auction of a high profile failure in which a foreclosure has led to the transfer of a building into the hands of a mid-tiered lender.

Boston's John Hancock Tower -- bought by Broadway Partners in 2006 for $1.3 billion -- sold for $660 million in an auction last year to Normandy Real Estate Partners and Five Mile Capital Partners, $20 million more than the mortgage.

Late last year, the W Hotel at Union Square in Manhattan was bought by LEM Mezzanine for $2 million above the $212 million debt on the property after Istithmar World Capital, Dubai World's private-equity arm, lost it in a foreclosure after it defaulted on its debt.

LEM Mezzanine, a private equity fund affiliated with Philadelphia real estate investment company Lubert-Adler Partners LP, held $20 million of the most junior piece of the debt on the W Hotel. Istithmar bought the property in 2006 for $285 million.

(Reporting by Ilaina Jonas; Editing by Phil Berlowitz)