Columbia Property Trust plans to use a six-month, $300m bridge loan from its unsecured credit facility for its $516m purchase of the The New York Times’ former headquarters in Midtown Manhattan.
The real estate investment trust said today that it has signed a definitive agreement to acquire the commercial condominium unit in the century-old, 16-story, 481,000 sq ft building at 229 West 43rd Street in the Times Square submarket from affiliates of Blackstone.
Blackstone purchased the office portion of the building in 2011 for $160m, investing more than $100m in renovations and ultimately releasing the space, which included a four-floor lease with Yahoo! Inc. in 2013.
The $300m of debt and additional “short-term borrowings” Columbia secured are expected to increase the REIT’s leverage to approximately 39% of gross real estate assets.
The firm said the 98%-leased commercial unit of the building is expected to have first-year in-place net operating income of approximately $22.3m. The acquisition is expected to close within 30 days.
“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 (after San Francisco), while spreading out lease maturities and capital commitments,” said Nelson Mills, president and CEO of Columbia Property Trust, in a statement, noting that the acquisition falls in line with the REIT’s strategy of “blending a number of value-add opportunities with more stable assets.”
The company’s additional Manhattan assets include 222 East 41st Street and 315 Park Avenue South.