The Real Deal New York

WarnerMedia looking to sell Hudson Yards office space for $2B

Media giant wants to do a sale-leaseback with buyer
January 08, 2019 04:00PM

Warner Media’s John Stankey and 30 Hudson Yards (Credit: Getty Images and KPF)

WarnerMedia is looking to sell the 1.4 million-square-foot office condominium it owns at Hudson Yards, and hopes to raise around $2 billion through the deal.

The entertainment company, which has yet to relocate from the Time Warner Center to its new offices at the under-construction 30 Hudson Yards, will look to do a 20-year sale-leaseback with the new owner, according to the Wall Street Journal.

The company hired a team led by Cushman & Wakefield’s Doug Harmon to negotiate the deal. If WarnerMedia’s office condo sold for near $2 billion, the stake would be nearly as much as the priciest office buildings ever sold in the city, including the $2.8 billion sale of the GM Building in 2008, the $2.4 billion buy of the Chelsea Market building and the $2.21 billion deal for 245 Park Avenue in 2017.

WarnerMedia purchased its office space, which spans the 16th through 51st floors, from developers the Related Companies and Oxford Properties Group for an undisclosed price as one of the first companies to invest during the earlier stages of Hudson Yards.

Coach, likewise, paid $530 million for a stake in 10 Hudson Yards. Then, after spending $220 million to build out the space, it entered into a sale-leaseback deal with German insurer Allianz for $707 million in 2016.

WarnerMedia’s realized gains from banking on rising neighborhoods before. The company purchased its 1.1 million-square-foot stake at the Time Warner Center more than a decade ago for $520 million. As it struck a deal to relocate to Hudson Yards, the media giant sold its office space for $1.31 billion to Related, the Government of Singapore Investment Corp. and the Abu Dhabi Investment Authority.

The Cushman & Wakefield team led by Harmon has experience with these kinds of sale-leasebacks, having represented Coach and TimeWarner in the aforementioned deals.

Related and Oxford sold much of their ownership interests in Hudson Yards’ office towers, raising billions of dollars to finance the project.

WarnerMedia is the new name of the company formerly known as Time Warner, which AT&T bought last year for $85 billion. [WSJ] – Rich Bockmann