The office portion of the Time Warner Center is getting closer to a billion-dollar-plus resolution.
Bids that clustered to the $1.3 billion mark came in last week for the 1.1 million square feet of offices and studio space owned by Time Warner. Marketed through Douglas Harmon and Adam Spies at Eastdil Secured, the high range would translate to roughly $1,180 a square foot.
The space includes the lower portion of the south tower, stretches over the retail podium and goes up into a portion of the north tower. The studios of 100,000 square feet are double- and triple-height and could be turned into offices, trading floors, re-rented to other entertainment companies — Al-Jazeera anyone? — or even a private basketball court.
Because the Time Warner Center makes a great picture postcard with its stunning, twin reflective towers and curving atrium retail around Columbus Circle on the edge of the most active of Central Park gates, the sale attracted its own global conglomerate of bidders.
“There are Japanese, Chinese, sovereign-wealth funds, pension funds, equity funds, local owners, users, pension funds and REITs,” advised one person briefed on the hefty competition.
When it was completed 10 years ago, the $1.8 billion project designed by David Childs of Skidmore, Owings & Merrill was the most expensive ever. Developed by the Related Cos., the building also includes the retail shops, luxury condominium residences, the Mandarin Oriental Hotel, Jazz@Lincoln Center and parking, all owned as separate condominiums.
The office segment has its own lobby on West 58th Street, while the executive floors are high-end built-out space with numerous terraces, and include amenities like a screening room and a cafeteria.
We also hear that at some point, the next owners could rename the building.
“It’s a great asset but . . . someone will take a big, big gamble on it as they have to get rents from $100 a square foot in the base to $140 a square foot above,” said Greg Kraut of Avison Young, which advised some bidders.
On condition of anonymity, various bidders tell us Time Warner will be leasing back the space for around five years, giving the entertainment titan time to move into its next quarters.
That relatively long stretch includes time for the development of a new building along with time to fit it out.
Mitchell Steir, CEO of Studley, overseeing the as much as 4 million square-foot consolidation and relocation of Time Warner, did not return calls for comment.
We also hear his client is taking “a breather” and stepping away from the search for a few months to get its own businesses in order.
Last month, it was revealed Related was trying to swap Extell’s Gary Barnett a site it owns with Boston Properties on Eighth Avenue and West 45th Street that we told you it was selling through Mark Weiss of Newmark Grubb Knight Frank.
This is next to a garage controlled by Barnett. In return, Related wanted Barnett’s 1 Hudson Yards site at 34th Street and Eleventh Avenue so it could move forward with its giant towers and retail podium.
Now we’ve learned the deal is actually in contract, with Related throwing in the Times Square site and adding cash to sweeten the pot to gain the 1 Hudson site from Barnett. None of the parties returned calls for comment.
Meanwhile, Harmon at Eastdil has been responsible for the last three city sales of more than $1 billion: the December 2010 $1.77 billion sale of 111 Eighth Ave. to Google, the $1.29 billion sale of 650 Madison Ave. to Crown Acquisitions and Highgate Holdings, and the recently sold Sony Building to Joseph Chetrit and David Bistricer, with a three-year leaseback for $1.1 billion.
Now, Sony is looking at several very different options for its future digs, including one just a skip and a hop away at 666 Fifth Ave.
In March, we told you the Japan-based giant had hired CBRE’s Mary Ann Tighe and Gregory Tosko to find a roughly 550,000-square-foot home where it could downsize and replace its current 850,000 square feet.
They are considering both the tech-type space in the Park Avenue South area that includes 225 and 233 Park Ave. South, plus 1 and 11 Madison — which is one of the favorites — as well as glass-and-steel towers like One and Four World Trade Centers.
But now, the glass and Class A building at 666 Fifth Ave. has also caught their eye.
Here, along with more direct space from co-owners Vornado Realty Trust and Kushner Cos., Citibank has 300,000 square feet available through only the middle of 2014 through Neil Goldmacher’s team at Newmark Grubb Knight Frank when it goes back to Vornado and Kushner.
The Citibank sign graces the top of the white tower, and getting its Sony name on top would be appealing to the Japanese, who are giving up their own nearby Chippendale-topped distinctive tower and would barely miss a step in their commutes. They also feel right at home with the Isamu Noguchi sculpture in the lobby.
“It’s about how they want to operate in the future,” said one real-estate source, stressing Sony still had plenty of time to decide.
No one returned calls or offered comment.
