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NEW YORK CITY-The New York Times Co. has sold its portion of its headquarters building at 620 Eighth Ave. to W.P. Carey & Co. and two affiliates in a $225-million sale-leaseback. In a release, the Times Co. says it will use proceeds from the sale to pay down debt.

GlobeSt.com first reported a possible sale-leaseback deal in January, and terms of the deal formally announced on Monday are similar to what was initially reported. Locally based W.P. Carey and two of its publicly-held, non-traded REIT affiliates, CPA:16–Global and CPA:17–Global, bought the 21 floors, totaling 750,000 square feet, which the Times Co. uses as headquarters space. Initial reports indicated that the space would be 19 floors.

The transaction does not encompass the six floors at 620 Eighth which the Times Co. leases to other tenants. Nor does it include any of Forest City Ratner Cos.’ 42% ownership of the 52-story tower.

A spokesman for W.P. Carey tells GlobeSt.com this is among the biggest transactions the investment company has undertaken to date. “We’ve done larger multi-asset transactions, but this is one of the largest single-asset sale-leasebacks we’ve done,” says the spokesman.

The spokesman says W.P. Carey was drawn to the deal because of “the opportunity to secure a very attractive current return, while limiting our downside risk because of the very good price per square foot.” In a release, Janet Robinson, president and CEO of the Times Co., says W. P. Carey “was able to clearly understand our company, our facility and our objectives.” Calls to the Times Co. for additional comment were not returned by deadline.

The lease term is 15 years, with an option for the Times Co. to repurchase its condominium interest in 620 Eighth for $250 million during the 10th year of the lease term, according to a joint statement from the two companies. The rental payment will be $24 million for the first year and will escalate through the term of the lease. Andrew Sachs and Michael Rotchford of Cushman & Wakefield advised the Times Co. in the deal.

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