Monday, March 9, 2009
Sign of the Times: NY Times Reaches Sale-Lease Deal for Part of Its Office
The New York Times Co. got a cash influx of $225 million when it agreed to a sale and leaseback of space in its new Manhattan headquarters today.
The premier media outlet in North America struck a deal with W.P. Carey & Co. to sell 21 floors, or about 750,000 rentable square feet, of its 52-story midtown Manhattan building. The Times will then rent the space back under a 15-year lease that gives it the option of buying back the space for $250 million after 10 years. The rental payment will be $24.0 million for the first year alone, and will escalate through the term of the lease.
That initial rate amounts to $32 per square foot, a bargain in midtown as Class A commercial space rents for at least $50 per square foot in the current market.
Like all other news organizations in this recession, the Times is short of cash, admitting to $1.1 billion of long-term debt. It's not the first move by the Times to improve its cash position. The company recently gained a $250 million loan from the Mexican billionaire Carlos Slim Helu.