Boston Properties Puts NYC Times Square Tower Up for SaleDavid M. Levitt and Brian Louis
Boston Properties Inc., the biggest U.S. office real estate investment trust, has put its Times Square Tower in Manhattan up for sale in a deal that may exceed $1 billion.
The 1.2 million-square-foot (111,000-square-meter) office building “is on the market as we speak,” Doug Linde, the Boston-based landlord’s president, said today at the National Association of Real Estate Investment Trusts conference in Chicago.
The 48-story tower would “easily” fetch more than $1,000 a square foot, said Dan Fasulo, managing director of Real Capital Analytics Inc. The pending sale of 650 Madison Ave. for a record $2,100 a square foot, and the purchase of a 40 percent stake in the General Motors Building in a deal that reflects a $1,700-a-square-foot value, probably have raised price expectations for Manhattan property owners, he said.
“There’s a significant amount of momentum for trophy properties in New York,” said Fasulo, whose New York-based research firm tracks commercial real estate sales. “I wouldn’t be surprised if those recent pricings don’t bring out a whole new wave of discretionary sellers. This window is open right now, but it won’t be open forever.”
Like 650 Madison Ave. and the GM Building in the Plaza District near Central Park, the Times Square Tower is in a highly desirable shopping district, Fasulo said. The Times Square Tower is almost fully occupied, according to data from CoStar Group Inc.
“It’s a great time to get the value recognized for some of our assets,” Linde said in an interview after his company’s presentation at the conference. “It makes sense at times to prune our portfolio.”
On Boston Properties’ earnings conference call last month, Linde said the REIT was considering asset sales of $1 billion or more in 2013.
Doug Harmon is leading a team of brokers at Eastdil Secured LLC in marketing the Times Square tower.
Boston Properties, founded by Mort Zuckerman, its billionaire chairman, built the skyscraper in the early 2000s. During construction, the accounting firm Arthur Andersen LLP agreed to be its anchor tenant, only to withdraw from the project in 2002 as it faced accusations of destroying records pertaining to Enron Corp., its client.
Less than a year later, the law firm O’Melveny & Myers LLP agreed to take 207,000 square feet, the first of several law firms now in the building. Ann Inc., owner of the Ann Taylor women’s fashion chain, leased 300,000 square feet the following year. The company has another 20,000 square feet of retail space, according to CoStar. The Ruby Tuesday restaurant chain is another retail tenant.
The building, also known as 7 Times Square, was the last-built of the four “elephant legs” -- high-rise office towers that were central to New York’s plan in the 1980s to revitalize the district, which had been plagued by crime, prostitution and pornography. The area is now a popular tourist attraction with a mix of flagship stores, family entertainment and office occupants such as Thomson Reuters Corp. and Ernst & Young LLP.