By Tess Stynes
Boston Properties Inc. (BXP) agreed to sell a 45% interest in
the ground leasehold interest and related tax credits of Times
Square Tower to an affiliate of Norges Bank for $684 million.
The real-estate investment trust said the firms will create a
joint venture after the deal closes, while Boston Properties will
retain property and leasing management for the venture.
Times Square Tower was developed by Boston Properties and
completed in 2004 and it is currently 99% leased. The property has
76 years remaining under its ground lease with New York City and
will benefit from a payment in lieu of taxes program through June
of 2024. The venture will have the right to purchase fee interest
in the property starting in July of that year.
Boston Properties said it expects to distribute at least the
amount of proceeds needed to avoid paying a corporate level tax on
any gain realized from the planned sale.
The REIT, which also manages and develops hotel and industrial
properties, has recorded a steady string of revenue growth, though
earnings at times have been weighed on by expenses and charges. Its
properties are concentrated in the Boston, midtown Manhattan and
Washington markets.
Shares were up 31 cents at $105.12 in early trading.
Write to Tess Stynes at tess.stynes@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires