Thursday, January 29, 2009
Times Co. Nears Deal On Building
By RUSSELL ADAMS and PETER GRANT
New York Times Co. is nearing a deal to sell a portion of its Midtown Manhattan headquarters in the latest of a string of recent efforts to reduce its debt load.
The deal under discussion is a sale-leaseback transaction in which Times Co. would sell the 19 floors it occupies at its 52-story headquarters to W.P. Carey & Co., an investment-management company, a person familiar with the talks said. Times Co. would continue to occupy and manage the space and have the right to buy it back in 10 years when its lease expires. Times Co. owns an additional six floors that it leases to other tenants; those floors aren't part of the deal.
Getty ImagesThe building, designed by the architect Renzo Piano, was completed in 2007. Times Co. owns 58% of the tower, and the developer Forest City Ratner owns the rest.
A spokeswoman for Times Co. said the company is pursuing a sale-leaseback of the building for as much as $225 million, and added: "Because the discussions are ongoing, we decline to comment on the status of the sale-leaseback."
The talks were previously reported Thursday night on the New York Times Web site.
Times Co. has $1.1 billion in debt and $46 million in cash and a substantial amount of debt maturing over the next couple of years. With print advertising declines accelerating across all newspapers, Times Co. has been forced to consider a number of options to free up cash.
The company in November cut its dividend by 75% and is trying to sell its stake in the company that owns the Boston Red Sox and the team's Fenway Park. Earlier this week Mexican billionaire Carlos Slim agreed to invest $250 million in the company in return for senior unsecured notes with detachable warrants convertible into common stock.
W.P. Carey is a 36-year-old firm that specializes in sale-leaseback transactions and has $10 billion of assets under management.
Write to Russell Adams at russell.adams@wsj.com and Peter Grant at peter.grant@wsj.com
Printed in The Wall Street Journal, page B2
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