Boston Properties to Sell Stakes in NYC, Boston Office Buildings for $1.5B

BOSTON—Locally-based Boston Properties, Inc. reports it has reached a binding purchase and sales agreement to sell its 45% interest in 601 Lexington Ave. in New York City and the Atlantic Wharf Office Building and 100 Federal St. in Boston to affiliates of Norges Bank Investment Management for a gross price of approximately $1.5 billion.

The sale price is based on the aggregate value of the three office properties of $4.06 billion, Boston Properties states. Upon closing, Boston Properties and affiliates of Norges Bank Investment Management will form a joint venture for each property, with Boston Properties retaining property and leasing management for all three properties.

Boston Properties' CEO Owen D. Thomas says of the deal, “We are delighted to expand our very important relationship with Norges Bank Investment Management, a leading global investor, through this partnership on three of our high-quality assets in New York and Boston. This transaction represents an important step in executing our current strategy of recycling capital from existing assets into new development.”

601 Lexington Ave. totals is approximately $1.7 million square feet and is located at East 53rd Street and Lexington Avenue. The 59-story tower and an ajdoining six story low-rise office and retail building were purchased by Boston Properties in 2001. A redevelopment and repositioning of the low-rise components of the property will be considered by the parties in the coming years. The complex is currently 99% leased and subject to existing mortgage indebtedness of approximately $714 million.

The Atlantic Wharf Office Building is a 791,000-square-foot office tower located on Boston's waterfront with frontage on the Rose Kennedy Greenway and Boston Harbor. Atlantic Wharf is Boston's first green skyscraper, certified LEED Platinum, and was a recipient of the 2012 ULI Global Awards for Excellence. This 31-story office building was developed by Boston Properties and completed in 2011.It is currently 100% leased. The property is unencumbered by debt.

100 Federal St. is a 1.3-million-square-foot office tower located in the city's Financial District. The 37-story tower occupies an entire two-acre city block and has a prime location overlooking Post Office Square Park. The partners will consider a redevelopment and retail enhancement of the plaza and lower level spaces of the property in the coming years. Boston Properties acquired this building in 2012, and it is currently 91% leased. The property is unencumbered by debt.

Eastdil Secured advised Boston Properties on the transaction.