Boston Properties' Times Square Tower on Sale - Analyst Blog


Boston Properties Inc .'s ( BXP ) Times Square Tower in Manhattan is on sale, as per a Bloomberg report. The deal value for this 1.2 million-square-foot office building is expected to surpass $1 billion. The news was revealed by the company at the National Association of Real Estate Investment Trusts conference in Chicago.

Mostly occupied, the Times Square Tower, a 47-story Class A office tower, enjoys an enviable location in the popular shopping district. With Times Square being New York's greatest transportation hub with easy access to several bus, subway, and rail lines, the property can fetch good value for Boston Properties. Its tenant roaster includes several law firms, restaurant chain and clothing retailer ANN Inc. ( ANN ).

Also, currently there is sufficient impetus for such prized properties in this region. This is well evident from the recent sale of 40% stake in New York's General Motors Building, to the families of Chinese property developer Zhang Xin and Brazil's banking tycoon Safra, in a deal that valued the property at around $3.4 billion. Boston Properties holds the remaining stake in this 2.0 million square feet (59 stories) building.

Also, according to a Financial times report, Carlyle Group has agreed to dispose a nearby office tower for $1.3 billion, nearly double the amount paid for it five years back. Such deals reflect the demand for these premium retail and office properties in the region.

Rise in rents and the value of such properties in the area are attractive and, hence, the value recognition of its asset through sale by Boston Properties is a strategic fit. The company can redistribute the funds in its several other projects. Moreover, the company is benefiting from improved core operations and has been successful in maintaining a strong grip on high barrier-to-entry geographic markets across the U.S.

Boston Properties currently holds a Zacks Rank #3 (Hold). However, other REITs that are performing better and deserve a look include CommonWealth REIT ( CWH ) and Sunstone Hotel Investors Inc. ( SHO ), both carrying a Zacks Rank #1 (Strong Buy).

ANN INC (ANN): Free Stock Analysis Report

BOSTON PPTYS (BXP): Free Stock Analysis Report

COMMONWEALTH RE (CWH): Free Stock Analysis Report

SUNSTONE HOTEL (SHO): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ANN , BXP , CWH , SHO

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