NEW YORK CITY—Jeff Schotz, EVP of SJP Properties has confimed to GlobeSt.com that the company and its partner, Prudential Real Estate Investors, have sold a 45% stake in Eleven Times Square to Norges Bank Investment Management.
The 1.1 million-square-foot office and retail Midtown tower is valued at $1.4 billion, putting Norges' investment at $630 million.
“The tremendous success we've had leasing the building—coupled with the capital markets today—led to this transaction with Norges,” Schotz tells GlobeSt.com. “The demand for the building was tremendous and frankly Norges was our top choice for our new partner because of its track record as a partner with other property owners in NYC.”
PREI and SJP will continue in the role they've had with the asset, Schotz notes. “This isn't about selling the building and walking away, we're going to continue to own, manage and lease the building, our headquarters office is there. We sold a portion because we wanted to take advantage of having reached such a successful stage of leasing.”
The minority sale to Norges followed a marketing process led by CBRE, which attracted significant interest from a global roster of international organizations and sovereign wealth funds.
“The strength of the tenant roster and the state-of-the art features at Eleven Times Square, combined with its central location in the heart of New York City, allowed us to capitalize on the strong investor demand for core office properties in New York,” adds Kevin Smith, a PREI senior managing director and head of the Americas business. “This transaction gives us the opportunity to retain control of this trophy asset with our long-term partner SJP while also allowing PREI to redeploy capital into other core investments that provide steady returns for our investors.”
Adds Schotz, “This transaction is reflective of Eleven Times Square's position as a premier destination for leading global and local companies. We believe that now is an appropriate time to recapitalize the building as we continue to look for opportunities to further expand our New York metropolitan area market presence.”
Completed in 2010 and located in a transportation hub at the intersection of Eighth avenue and 42nd street, the LEED-Gold-certified Eleven Times Square, inclusive of signed leases and current activity, will be approximately 90% leased. The property is anchored by Microsoft Corp. and global law firm Proskauer, along with a diverse roster of tenants across the finance, technology, legal, and media industries.
Situated between Bryant Park and Hudson Yards, Eleven Times Square offers access to numerous restaurants, hotels and entertainment and shopping venues. Additionally, the building features an on-site subway entrance connecting to 12 subway lines, the Port Authority bus terminal and commuter parking lot.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
