New York Times will buy back its HQ leasehold
$250M option goes into effect in 2019
We won’t bury the lede: the New York Times Company will buy back the leasehold on part of its Eighth Avenue headquarters for $250 million, according to documents filed with the SEC Wednesday, exercising an option in a deal struck in 2009.
The Times informed the current leaseholder, investment firm W.P. Carey & Company, that it will repurchase its interest in a 750,000-square-foot office condo at 620 Eighth Avenue in 2019, when the option goes into effect.
W.P. Carey bought the leasehold for $225 million in 2009, in a sale-leaseback deal that was designed to last for up to 15 years. The newspaper reported at the time that the sale-leaseback deal started with an annual lease payment of $24 million a year, or $32 per square foot, far below average asking prices at the time.
When the deal was made, the Times was in the midst of extricating itself from $1 billion in debt, and W.P. Carey had characterized its purchase as a loan, rather than a real estate investment, according to the Times article from 2009.
The publishing company had spent more than $600 million on its 1.8 million-square-foot headquarters, which was completed in 2007, and holds a 58 percent stake in the building (Forest City Realty Trust is a minority partner).
Earlier this month, the Times subleased 140,000 square feet to trading network Liquidnet, or roughly half of the 250,000 square feet they had put up for lease in late 2016.