L&L Holding Company is gaining another partner at a Flatiron office building where tenant losses loom.
Boston Properties ponied up $280.2 million for a 27 percent stake in 200 Fifth Avenue, according to a quarterly earnings statement reported by Bisnow. The real estate investment trust will provide leasing services for the tower and serve as property manager alongside L&L and JPMorgan Asset Management, another co-owner in the building.
The trust’s purchase includes $120.1 million in cash and the assumption of a pro rata share — $160.1 million — of the outstanding mortgage, due to mature in November 2028.
The deal is expected to close by the end of the year. Once the deal goes through, the century-old office tower will be valued at more than $1 billion.
The landlords recently completed $135 million in capital upgrades at the landmarked building. That could attract new tenants to the 14-story, 870,000-square-foot property, which is 93 percent leased but on the verge of having more available space.
Tiffany & Co. calls the building its global headquarters and recently agreed to a 10-year extension for its office, stretching the jeweler’s occupancy to 2036. But the company is eliminating roughly a third of its space, reducing its footprint from 400,000 square feet to 287,000 square feet.
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Yelp is planning on letting its 70,000-square-foot lease expire in 2024, and was previously reported to be looking for a company to sublease the space in the interim.
L&L acquired the building, formerly known as the International Toy Center, in 2007 alongside Lehman Brothers for $480 million. Four years later, JPMorgan swooped in to acquire Lehman’s stake.
Boston Properties threw a bit of support behind New York’s office market, where a filing reported by Crain’s says it owns 9.5 million square feet. In comments this week, the trust said the Big Apple and Boston were more insulated to the fall among tech players than San Francisco or Seattle’s markets, but it expects office vacancy rates to rise across the country next year.
— Holden Walter-Warner