Commercial real estate investment firm Boston Properties said it is nearing the final round of talks to buy a $120 million stake in the $3 billion 1 World Trade Center project, which would potentially involve leasing and management of the property.
The Boston-based firm confirmed the bidding during its first-quarter earnings call with investment analysts this morning. Boston Properties is participating in the third round of bidding for the project, and faces high-profile competitors like Durst Organization, Related Companies and other firms.
“The idea is to try to bring in an equity partner that has a stake in the building but more importantly puts their expertise to use in managing the asset long term,” said Steve Sigmund, spokesperson for the Port Authority of New York & New Jersey, which controls the previously named Freedom Tower project.
Boston Properties, one of the biggest commercial office investors in the New York market, reported funds from operations of $149.6 million in the first quarter compared to $134.8 million in first-quarter 2008.
About 42 percent of the company’s income is derived from New York properties, where it owns several trophy towers, including the iconic General Motors building.
“We are, I think, continuing to do fairly well as a company in what has been a very, very bad environment, but one which I believe is somewhat moderating and improving,” said Mortimer Zuckerman, chairman of Boston Properties and publisher of the New York Daily News, on the conference call.
Funds included 5 cents a share related to ending a lease at 250 West 55th Street, where the company suspended construction of the 1-million-square-foot office tower designed by Skidmore, Owings & Merrill in 2009.
Boston Properties said that on March 1 it refinanced a mortgage loan at 125 West 55th Street, where it operates a joint venture that owns 60 percent of the property. The venture repaid $63.5 million in mezzanine loans and has a new $207 million mortgage loan that matures in 2015.
Boston Properties also refinanced a $190 million mortgage loan with a 5.1 percent fixed rate at Two Grand Central Tower, where it is also part of a joint venture that owns 60 percent of the building. The $190 million loan was originally scheduled to mature in July, but the loan, which now has a $180 million balance, comes due in 2015 at a higher 6 percent rate.
Zuckerman said the company recently raised $700 million, and along with about $3 billion in equity, it will be looking at opportunities to buy distressed assets over the next 12 to 18 months.