NEW YORK CITY—GlobeSt.com has confirmed that Blackstone is looking to sell its office condominium on the top dozen floors at Midtown's former New York Times building.
Approximately 78% leased and standing at 479,000 square feet of space, according to Real Estate Alert, the space at 229 W. 43rd St. is expected to command a sale price of about $525 million, or roughly $1,100 per square foot.
Blackstone bought the condo in 2011 for $160 million from a joint venture between Africa Israel Investments and Five Mile Capital. Just last week, that same JV agreed to sell the building's 250,000-square foot retail condominium to a joint venture led by Kushner Cos. That property's occupiers include Bowlmor Lanes, Discovery Times Square, Guitar Center, Guy's American Kitchen & Bar and Haru Times Square.
At today's estimated value, the capitalization rate on the sale of the building's office condo would be between 4.5% and 5%, the Alert reports. However, a buyer could boost that return by leasing the vacant space. Blackstone boosted the building's cache with a $105 million capital improvement plan, says Crain's New York Business, and signing technology, media and advertising companies tenants such as Yahoo! Inc.
The web portal and search engine's lease is for 193,000 square feet until 2025. Other large TAMI tenants include Collective Media, which has 57,000 square feet until 2024; 10gen, 50,000 square feet through year-end 2017 and Snapchat, 26,000 square feet until 2025. The office condo features characteristics that appeal to the TAMI sector, such as loft-style space, high ceilings and outdoor terraces.
The property faces both West 43rd and West 44th Streets, between Seventh and Eighth Avenues. It's comprised of four connected buildings, the first of which was built in 1913 for the Times. It was expanded in 1964—when the publisher converted the adjacent Paramount Theater into office space—and on several occasions over the years.
The Times sold the property for $175 million in 2004 to a Tishman Speyer-led limitedpartnership and vacated it two years later, moving to its current headquarters at 620 Eighth Avenue. In 2007, Africa Israel bought the entire building for $525 million, with plans to spend some $200 million on renovations, according to Real Estate Alert. After the 2007-2008 financial crash, however, the company struggled with the property's debt. The locally-based Five Mile was one of the lenders, and in a 2009 loan modification it joined Africa Israel as an equity partner.
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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.
