Real estate investment trust Boston Properties Inc. (BXP) agreed Monday to sell a 45 percent ownership interest in its 47-story Times Square Tower to a Norwegian Sovereign Wealth fund in an all-cash deal valued at $684 million.
The deal includes 45 percent ground leasehold interest and related tax credits. The property is unencumbered by debt. The deal is expected to close within the next 90 days.
The Norwegian Government Pension Fund Global entered into a joint venture agreement with Boston Properties to buy the ownership interest in an office property in New York. The fund is managed by Norges Bank, which is Norway's central bank and also manages Norway's foreign exchange reserves.
"We are 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 Executive Chairman Mortimer Zuckerman said in a statement.
In early June 2013, Boston Properties reportedly put up the Times Square Tower in Manhattan on the block, and was expecting proceeds in excess of $1 billion.
The proposed sale values the entire Times Square Tower office complex at $1.52 billion. Boston Properties, the seller, has retained a 55 percent interest in the property and will manage the building on behalf of the partnership.
The Times Square Tower occupies the full city block and is located between the 41st and 42nd street, between Broadway and Seventh Avenue, anchoring the Times Square district. This 47-story, Class A office tower consists of 1.25 million square feet (115,200 square meters) of rentable space that was developed by Boston Properties and completed in 2004.
The property is currently 99 percent leased, and is subject to a ground lease with The City of New York with 76 years remaining.
In Monday's regular trading session, BXP is currently trading at $105.42, up $0.61 or 0.58% on a volume of 0.17 million shares.
by RTT Staff Writer
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