NEW YORK CITY — Columbia Property Trust Inc. (NYSE: CXP) has signed a definitive agreement to acquire the commercial condominium unit in the historic New York Times Building from affiliates of Blackstone Real Estate Partners VI LP for $516 million. The 16-story, 481,110-square-foot, Class A building is located at 229 W. 43rd St. in the Times Square submarket of Manhattan.
The acquisition is expected to be funded with a $300 million six-month bridge loan and short-term borrowings under Columbia’s $500 million unsecured credit facility, which is expected to increase the company’s leverage to approximately 39 percent of gross real estate assets (as of June 30, adjusted for recent dispositions).
Currently 98 percent leased, the commercial unit of 229 W. 43rd St. is expected to have first-year in-place net operating income of approximately $22.3 million.
“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, while spreading out lease maturities and capital commitments,” says Nelson Mills, president and CEO of Atlanta-based Columbia Property Trust.
The acquisition is expected to close within 30 days, subject to customary closing conditions.
Built and assembled in multiple phases from 1912 through 1947, the former home of The New York Times recently underwent a redevelopment program that totaled $167 million, including a full upgrade of the building’s infrastructure, amenities and aesthetics. (The headquarters of The New York Times moved to 620 Eighth Avenue in 2007.)
The property, which is not impeded by a ground lease, consists of a condominium interest that spans a portion of the first and fourth floors and all of floors five through 16. The lower three-and-a-half floors are owned by a separate entity. Major tenants at the property include Yahoo!, Snapchat, Collective Inc., and MongoDB.
Columbia Property Trust operates, manages and acquires Class A office buildings concentrated in central business districts. As of July 1, Columbia owned 27 office properties and one hotel, which included 40 buildings totaling 13.4 million square feet of office space.
The stock price of Columbia Property Trust closed Thursday, July 23 at $24.51 per share, down from $26.03 per share a year ago.