Time Warner Said Near Deal to Sell Manhattan Headquarters
Time Warner Inc. (TWX) is close to a deal to sell its headquarters to Related Cos. for more than $1.3 billion and move to a new skyscraper planned on Manhattan’s far west side, a person with knowledge of the negotiations said.
The plan calls for the media company to anchor a 2.4 million-square-foot (223,000-square-meter) tower on the northeast corner of Related’s Hudson Yards project, said the person, who asked not to be identified because the talks are private. Time Warner would sell its 1.1 million-square-foot space at its namesake complex to an investment group led by Related and lease it back for five years, about the time it would take to build the skyscraper, the person said.
An agreement would be a breakthrough for Stephen Ross’s Related, firming up its plans to build the tallest tower planned for Hudson Yards, a 26-acre (11-hectare) parcel near the Hudson River. Mayor Michael Bloomberg in April called the complex one of the largest private developments ever undertaken in the U.S., poised to transform the largely industrial western edge of Midtown into an extension of the country’s largest and most expensive office district.
It would also culminate Time Warner’s search for a more cost-effective real estate presence in New York, where its offices are spread among several Midtown buildings. Time Warner divisions with large Manhattan offices include the CNN news network, the HBO cable channel and the Time Inc. magazine business, which is being spun off.
Time Warner intends to house its corporate offices and HBO at the new 80-story tower, according to another person with knowledge of its plans. The two sides are still in talks and a deal may not come to fruition, the person said.
Related was a lead developer behind Time Warner Center, a two-tower complex at the southwest corner of Central Park that was completed in 2004. That project also includes high-rise condominiums, a shopping mall, a Mandarin Oriental Hotel and Jazz at Lincoln Center, a music venue. The developer owns the retail space and some of the other offices.
In late 2011, Time Warner Chief Executive Officer Jeffrey Bewkes said in an interview with the New York Times that its offices at the complex were an “indulgence” in an era of rising competition from more nimble Internet-based companies. The company began to study how to reduce real estate expenses around that time.
Keith Cocozza, a spokesman for Time Warner, declined to comment, as did Joanna Rose, a spokeswoman for New York-based Related. Martha Wallau, a spokeswoman for Eastdil Secured LLC, whose brokers Doug Harmon and Adam Spies are representing the media firm in the sale of its space, didn’t return a phone message.
The discussions were reported yesterday by the Wall Street Journal.
Related began construction late last year on the first of its Hudson Yards towers, to be anchored by the luxury goods maker Coach Inc. In April it signed leases with cosmetics company L’Oreal USA and SAP AG (SAP), the German software firm.
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