For $28M, Boston Properties pardons CBS from GM Building lease
Boston Properties will have another high-profile vacancy to focus on beyond the half of its rising Eighth Avenue office tower that remains unrented. In an earnings call last week, Boston Properties CEO Doug Linde said the landlord has negotiated a deal with broadcaster CBS to release it from a 39,000-square-foot lease in the General Motors Building, at 767 Fifth Avenue, that is signed through 2015, according to the Wall Street Journal.
CBS, which used the space for its Morning Show studios, will pay $28 million to get out from the obligation, which would have cost it $39 million over the next three years. The Real Deal previously reported the GM Building was the city’s most profitable last year.
“We just basically fast-forwarded the rental obligation and we did this because we made the determination that controlling the space and then trying to lease it put us in a better position…than going out and looking for a tenant and trying to work out a termination deal with CBS,” Linde said.
The deal comes as Linde acknowledged the city’s office leasing market was a mixed bag. While entrepreneurs flock to city offices to capitalize on its talented young workforce, he said larger office consumers are consolidating their space even as the market is preparing to take on millions of square feet of additional supply. [WSJ, 2nd item]