NEW YORK — Boston Properties Inc. (NYSE: BXP) has completed the sale of its 45 percent ownership interest in Times Square Tower for $684 million. An affiliate of Norges Bank acquired the interest on behalf of Norway’s sovereign wealth fund, the Norwegian Government Pension Fund – Global.
Times Square Tower is a 1.25 million-square-foot, Class A office tower that includes associated retail space and signage. Developed by Boston Properties and completed in 2004, the building was 99 percent leased at the time of the sale.
Mortimer Zuckerman, executive chairman of Boston Properties, told the Wall Street Journal that the company was “extremely pleased to form a new and important relationship with such a strong and reputable organization as Norges Bank, while at the same time once again demonstrating our ability to create and realize value for our shareholders through our development and management expertise.”
Boston Properties retains a 55 percent ownership interest, as well as property management and leasing duties following the sale. The REIT formed a joint venture with Norges Bank at the close of the deal. New York City holds the property’s ground lease, the term of which has 76 years remaining.
Times Square Tower, which occupies a full city block between 41st and 42nd streets at Broadway and Seventh Avenue, benefits from a payment in lieu of taxes (PILOT) program until June 2024. After that period, the Boston-Norges joint venture will have the right to purchase the fee interest in the property.
The Norwegian Government Pension Fund – Global is valued at approximately $750 billion, making it the largest sovereign wealth fund in the world, according to the WSJ. Known until 2006 as the Petroleum Fund of Norway, it is generated by the surplus wealth produced by the Norwegian petroleum income and is invested worldwide.
Specializing in Class A office assets, Boston Properties is a self-administered and self-managed trust that develops, redevelops, acquires, manages operates and owns a diverse portfolio concentrated in Boston, New York, Princeton, N.J., San Francisco and Washington, D.C. The per-share stock price of the REIT closed at $103.44 on Oct. 9, down from $109.58 a year ago.
— John McCurdy