SL Green Realty Corp., a real-estate investment trust that specializes in Manhattan properties, and Morgan Stanley Real Estate Fund III LP agreed to sell 180 Madison Ave. for $92.7 million, taking advantage of what SL Green called a “white-hot” market.

The joint venture bought the Madison Avenue building in December 2000 for $41.2 million and expects to have a gain of about $40 million from the sale, New York-based SL Green said in a statement today. SL Green won’t disclose the buyer until the transaction is close to completion in the third quarter, said a vice president of investor relations, Michelle LeRoy.

The venture sold the property because the “timing’s right given the white-hot market, and we can recognize a gain and use that in more lucrative assets,” Ms. LeRoy said in a telephone interview.

The sale will end the partnership. The other properties bought and sold by the joint venture, all in New York, are 90 Broad St., 469 Seventh Ave. and 321 W. 44th St. SL Green and City Investment Fund, an affiliate of Morgan Stanley Real Estate Fund, are partners in a second venture that has purchased 19 W. 44th St. and 485 Lexington Ave.

SL Green agreed last week to buy 1 Madison Ave., a landmark New York City skyscraper, from MetLife Inc. for $918 million. It was the largest Manhattan real-estate deal in 18 months. SL Green plans to convert the tower of the almost 1.5 million-square-foot building into residential condominiums.

Proceeds from the 180 Madison Ave. sale will be used to pay debt and for acquisitions, Ms. LeRoy said. Whether the money will be used to fund the MetLife deal depends on when the two transactions are completed.

SL Green shares rose 38 cents to $55.82 as of 12:39 p.m. in New York Stock Exchange composite trading. They have gained 25% in the past year, more than the 12% increase in the Bloomberg REIT Index.