Brookfield Said to Buy BofA’s Stake in Ex-Merrill Headquarters
Brookfield Office Properties Inc. (BPO) agreed to buy Bank of America Corp. (BAC)’s 49 percent stake in 4 World Financial Center in lower Manhattan, the former headquarters of Merrill Lynch & Co., according to a person with knowledge of transaction.
Brookfield will pay $225 million to $250 million for the bank’s interest in the 34-story tower, said the person, who asked not to be identified because the deal hasn’t been completed. The New York-based real estate company controls the complex, which has 8 million square feet (743,000 square meters) of office and retail space.
Bank of America, which agreed to acquired Merrill as it neared collapse during the 2008 financial crisis, plans to reduce its occupancy at the World Financial Center to about 750,000 square feet from 2.7 million square feet. The biggest U.S. lender by assets leases 4.6 million square feet at the center under contracts that expire in 2013, with most of the remaining space sublet to other companies. Its New York main office at 1 Bryant Park in Midtown was completed last year.
Kelli Raulerson, a spokeswoman at the bank’s headquarters in Charlotte, North Carolina, declined to comment on the pending sale, which was reported earlier today by the Wall Street Journal. “As we evaluate our space needs, we see an opportunity to reduce our fixed real estate costs,” she said in an e-mail. Melissa Coley, a Brookfield spokeswoman, declined to comment.
Bank of America is seeking to reduce expenses after losing about half its stock-market value. It plans to eliminate 324 New York-based jobs starting next month, it said in a Sept. 29 filing with the state labor department. The job reductions were part of 3,500 disclosed in August, and the bank said it has already notified those affected.
Brookfield’s holdings in New York include 1 Liberty Plaza and 245 Park Ave. It also owns Zuccotti Park, which has served for about a month as the base of Occupy Wall Street, a movement protesting financial greed.
Bank of America plans to hold on to about 500,000 square feet at 4 World Financial and 250,000 square feet at 2 World Financial Center, according to the person familiar with the matter. The sale is awaiting sign-off from rating companies because of its potential impact on debt associated with the four-tower complex, the person said.
To contact the reporter on this story: David M. Levitt in New York at email@example.com
To contact the editor responsible for this story: Kara Wetzel at firstname.lastname@example.org