Boston Properties to Sell 45% Interest in Times Square Tower for $684 Million

   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.

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