Boston Properties Takes NYC GM Building, 3 Others from Macklowe
- May 25, 2008
Boston Properties Inc. has emerged the winner of the the GM building in New York City–and seller Macklowe Properties will live to fight another day, as the two cut a deal worth $3.96 billion over the Memorial Day weekend, the buyer has reported. The portfolio includes the GM trophy plus 540 Madison Ave., 125 West 55th St. and Two Grand Central Tower. The General Motors Building (pictured) is an approximately 2,000,000 rentable square foot office building located at the corner of 5th Avenue and Central Park South in New York City. 540 Madison Avenue is a 39-story building located at Madison Avenue at 55th Street that contains approximately 292,000 rentable square feet. 125 West 55th Street is a 23-story building, spanning from 55th to 56th Streets between Avenue of the Americas and Seventh Avenue, that contains approximately 591,000 rentable square feet. Two Grand Central Tower is a 44-story mid-block tower that runs from 44th to 45th Street between Lexington and Third Avenue and contains approximately 664,000 rentable square feet. The buyer is putting in approximately $1.5 billion in cash, the issuance to one of the selling entities of $10 million of common units of limited partnership interest in Boston Properties Limited Partnership and is taking on approximately $2.46 billion of fixed rate debt. the debt sits heaviest on the GM builidng, at $1.9 billion , including both secured and mezzanine loans with an average interest rate of 5.97 percent per annum, maturing in September 2017. The intention is to acquire the lenders’ interest in a portion of the mezzanine loans having an aggregate principal amount of $294 million. The building at 540 Madison Ave. has two secured loans for $120 million, with an average rate of 5.28 percent, maturing in July 2013. Two Grand Central Tower has a $190 million secured loan with a rate of 5.1 percent, maturing July 2010. The building at 125 West 55th St. has $263.5 million of secured and mezzanine loans with an average rate of 6.31 percent, due on March 2010. While Boston properties did not officially announce its partners in the deal, according to The New York Times, Goldman Sachs, Qatar and Kuwait are involved in the financing. Boston Properties and reported that is will retain 49 percent of the ventrue and will manage the properties. The deal is slated to close in stages, the first involved the GM builidng, in June. The buyer has deposited a $165 million letter of credit to start the process. Goldman Sachs and Morgan Stanley are acting as financial advisors to Boston Properties and the investors in these transactions, and Lehman Brothers and Deutsche Bank are also advising Boston Properties. Proskauer Rose L.L.P. and Goodwin Procter L.L.P. are providing legal and tax advice to buyer.