WarnerMedia, previously known as Time Warner Inc., is looking to sell its 1.4 million-square-foot Manhattan office condominium at 30 Hudson Yards, aiming to raise around $2 billion through the deal. The company is not abandoning plans to brand the location as its new headquarters but rather seeks a sale-leaseback agreement.
Expected to open this year, the 1,296 foot-tall 30 Hudson Yards will be the tallest tower of the extensive Hudson Yards redevelopment project led by Related Companies and Oxford Properties Group. When completed, it will feature the highest outdoor observation deck in the Western Hemisphere at more than 1,100 feet above ground.
In 2014, WarnerMedia became one of the first companies to invest in the new project, purchasing space spanning the 16th through 51st floors at 30 Hudson Yards. The office condo represents approximately 60 percent of the 2.6 million-square-foot skyscraper. The entertainment company, which includes CNN, HBO, the Warner Bros film company, and Turner Broadcasting, has yet to relocate headquarters from the Time Warner Center to the new space, as planned.
According to the Wall Street Journal, who first covered the news, the media giant tasked Cushman & Wakefield with the marketing of the property, planning to cash in and sign a 20-year lease with the new owner. If the stake sells for $2 billion, it will mark one of the priciest U.S. single building sales, a list that includes the $2.4 billion purchase of the Chelsea Market building. The deal would help WarnerMedia reduce debt.
“You can have a higher rate of return from capital put back into the business than on a depreciating asset going forward,” John Vazquez, a Verizon Communications Senior Vice President, told the Journal. Verizon has done several sale-leasebacks, amounting to $1 billion, over the last four years.
Similarly, Coach, the first tenant to commit to Hudson Yards, purchased a $530 million stake in 10 Hudson Yards, later entering a sale-leaseback deal with Allianz. The property exchanged hands in 2016 for $707 million, after Coach spent $220 million building out the space, reports The Real Deal.