Time Warner Inc. confirmed Thursday it sold its office space at
the Time Warner Center in Manhattan for $1.3 billion to developer
Related Cos. and will lease back the office space until 2019.
Related and Time Warner were close to a deal but needed
financing for the bid, The Wall Street Journal reported earlier
this week. Two sovereign-wealth funds--the Government of Singapore
Investment Corp. and the Abu Dhabi Investment Authority--have aided
Related in purchasing the 1.1 million square feet of office
space.
As part of the deal, Time Warner will relocate to a building
that Related plans to develop in its Hudson Yards project on
Manhattan's far West Side. Time Warner said it would acquire more
than one million square feet of available commercial space in 30
Hudson Yards located at the southwest corner of 10th Avenue and
33rd Street.
The company expects about 5,000 employees from its corporate
operations and its HBO, Turner Broadcasting, and Warner Bros.
businesses to occupy the Hudson Yards space by the end of 2018.
Time Warner and Related have agreed to develop Hudson Yards and
expect to finish the final building development documents in the
first half of the year. Related hasn't completed financing for that
building.
Time Warner spent about $520 million to construct its current
headquarters about a decade ago. Chief Executive Jeff Bewkes said
the move is an important step in the company's two-year long
process to start consolidating its New York operations.
Thursday's deal marks one of the biggest in a surge of deals
involving foreign investors in U.S. commercial real estate.
Increased demand from overseas has helped drive U.S. commercial
property values to record levels, particularly in major cities
favored by global firms.
Foreign buyers are seeking out the U.S. as a place to spend
their growing piles of cash, particularly as other markets such as
Europe remain anemic. Non-U.S. buyers purchased more than $46
billion of property in 2013, up from $35 billion in 2012 and the
most since 2007, according to real estate data firm RealCapital
Analytics Inc.
Write to Everdeen Mason at everdeen.mason@wsj.com
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