Columbia Property Trust, Inc. announced it has signed a definitive agreement to acquire the commercial condominium unit in the historic New York Times Building. The 16-story, 481,110 sf Class-A office building located at 229 West 43rd Street in the Times Square submarket of Manhattan, the property was purchased from affiliates of Blackstone Real Estate Partners VI L.P. for $516 million.
The acquisition is expected to close within 30 days subject to customary closing conditions and is expected to be funded with a $300 million six-month bridge loan and short-term borrowings under Columbia’s $500 million unsecured credit facility.
This is expected to increase the company’s leverage to approximately 39 percent of gross real estate assets (as of June 30, 2015, adjusted for recent dispositions). Currently 98 percent leased, the commercial unit of 229 West 43rd Street is expected to have first-year in-place net operating income (NOI) of approximately $22.3 million. The acquisition will bring Columbia’s portfolio to approximately 69 percent CBD and 79 percent multi-tenant and its exposure to highbarrier markets to 52 percent, all based on annualized lease revenue.
“The addition of 229 West 43rd Street to our other Manhattan properties will mirror what we have
successfully achieved across our portfolio as a whole and in San Francisco in particular – blending a
number of value-add opportunities with more stable assets in high-barrier primary markets,” said Nelson Mills, President and CEO of Columbia Property Trust. “Acquiring this iconic property with such strong tenancy and below-market rents at attractive pricing compared with other New York transactions enables us to increase exposure in what will be our second largest market, while spreading out lease maturities and capital commitments.”
Built and assembled in multiple phases from 1912 through 1947, the former home of The New York
Times has undergone a recent redevelopment program that totaled $167 million, including a full upgrade of the building’s infrastructure, amenities and aesthetics. The property, which is not encumbered by a ground lease, consists of a condominium interest that spans a portion of the first and fourth floors and all of floors five through sixteen. The lower three and a half floors are owned by a separate entity. Major tenants at the property include Yahoo!, Snapchat, Collective Inc., and MongoDB.