May 3 (Bloomberg) -- Bank of America Corp. agreed to sell Hearst Tower in downtown Charlotte, North Carolina, for $250 million to Parkway Properties Inc. as part of the bank’s plan to cut costs.
Bank of America will lease back 322,000 square feet (30,000 square meters) in the 972,000-square-foot building, Parkway said today in a statement. The tower is 94 percent leased and the bank’s new agreement will run through March 2022, the Orlando, Florida-based real estate company said.
Bank of America, the second-largest U.S. lender by assets, said in February it may sell all its offices as part of its efforts to reduce expenses, sparing only its headquarters building in Charlotte and Bank of America Tower at 1 Bryant Park in Manhattan. The 46-story Hearst Tower, Charlotte’s fourth-tallest building, opened in 2002, according to the property’s website.
“It is a compelling real estate opportunity -– a trophy building, with a stable tenant base, in a submarket with improving fundamentals, at an attractive basis,” Jim Heistand, Parkway’s chief executive officer, said in the statement.
In March, Bank of America sold 100 Federal St. in downtown Boston to Boston Properties Inc., the largest U.S. office real estate investment trust, for $615 million. The bank leased back 787,000 square feet at the 1.3 million-square-foot tower.
TPG, a closely held investment firm with $49 billion under management, is making a $200 million investment in Parkway that will be used to finance the Hearst Tower purchase, according to the statement. TPG agreed to buy shares of Parkway for $11.25 each, 12 percent more than the 30-day trailing average closing price of Parkway’s stock.
Parkway fell 0.9 percent to $9.96 today in New York. The shares have fallen 41 percent in the past year.
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