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NEW YORK CITY-The Paramount Group has acquired the 24-story Candler Tower, located in the Times Square District. The 227,685-sf asset contains a mix of office and retail space.

WP Carey & Co. negotiated the transaction on behalf of two of its non-traded REIT affiliates, Corporate Property Associates 14 and Corporate Property Associates 15, that jointly owned the property. A spokesman for Paramount Group declined to release the acquisition price; however, he did tell GlobeSt.com that the company plans to hold onto the property “adding value as needed.”

Candler Tower is located at 220 W. 42nd St., between Seventh and Eighth avenues. The entire building is triple-net leased to SFX, the primary operating entity of Live Nation, Inc. According to Paramount, the SFX lease, which expires in September 2020, is guaranteed by Clear Channel Communications. Additionally, Paramount explains that McDonald’s occupies 100% of the retail space under a sublet agreement. The site is the restaurant chain’s flagship Times Square location. McDonald’s recently invested more than $13 million in renovations to the first three floors, two of which are restaurant space.

“The property represented an unprecedented opportunity to acquire a fully leased, recently renovated class A property with guaranteed escalating rental income through 2020 at a significant discount to replacement cost,” Paramount Group president and CEO Albert P. Belcher says in a statement. “In addition, its Times Square location at ‘the Crossroads of the World,’ only made the buy that much more attractive.”

Candler Tower was built in 1912 by Asa Candler. One of the last remaining white terra-cotta skyscrapers in the city, Candler Tower was restored in the mid-1990s through a $35-million capital improvement program.

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