Liberty Sells 80% Stake in Comcast Center for $404M

As such, the Malvern-based developer is responsible for completing the building's initial leasing. Liberty will receive leasing and property management fees and "a possible promoted interest if certain return thresholds are met," according to a statement. A Liberty spokeswoman tells GlobeSt.com, "it's very standard practice for the selling partner in a JV to receive a higher consideration if they outperform, and we don't disclose the details."

The transaction values the 1.2-million-sf property at $505 million, which puts CommerzLeasing's contribution at $404 million, and also allocates approximately $10 million for closing costs and future refurbishment costs. According to the spokeswoman, that represents an additional $8 million from CommerzLeasing for its 80% share in the JV. In connection with the transaction, the joint venture has obtained a $324-million forward loan commitment from Citigroup Global Markets Realty Corp. Assuming that the loan closes in March 2008, the rate is 6.15%.

Comcast Center is currently 73% leased to four tenants, the largest being Comcast Corp., which is taking 873,000 sf and has options on more. Under the agreement with CommerzLeasing, Liberty is obligated to complete the building, which is scheduled for a phased-in occupancy beginning in late 2007. The property's development cost is $472 million, including the $10-million refurbishment costs.

Referring to the sale and the loan commitment, Bill Hankowsky, Liberty's CEO, says in a statement, "these two transactions complete the planned recapitalization of Comcast Center, reducing Liberty's capital risk while allowing us to continue to bear our full complement of development, leasing and operation skills. …This capitalization will allow Liberty to direct our capital to additional value-creating projects." Los Angeles-based Eastdil Secured advised Liberty. Real Estate Capital Partners served as CommerzLeasing's US real estate advisor.