NEW YORK (Reuters) – Related Companies has won a bid to buy a stake in the second-tallest office building in Manhattan from AT&T’s WarnerMedia in a deal expected to top $2 billion, a source involved in the bidding said on Monday.
FILE PHOTO: Signage for an AT&T store is seen in New York October 29, 2014. REUTERS/Shannon Stapleton
The winning bid for WarnerMedia’s 1.5 million square feet (139,355 meters) of space at 30 Hudson Yards, the hub of the new development on Manhattan’s far west side, was chosen last week, the source said.
AT&T, looking to cut debt after last year’s $85 billion takeover of Time Warner, plans to lease back the space at the tower, which has the highest outdoor observation deck in the Western Hemisphere jutting out from the 100th floor.
AT&T declined to comment. Doug Harmon, the broker at Cushman & Wakefield handling the transaction, declined to comment, as did Joanna Rose, a spokeswoman for Related.
The deal would be similar to Time Warner’s sale of its office space in the Time Warner Center in 2014 to Related and two sovereign wealth partners in the deal, the Abu Dhabi Investment Authority and Singapore’s GIC.
That sale allowed Time Warner to acquire its space at Hudson Yards, a $25 billion project developed by Related with Canada’s Oxford Properties that officially opened last month.
Time Warner aimed to consolidate 5,000 employees spread across seven locations into one site. WarnerMedia recently began moving into 30 Hudson Yards, the first tenant to do so.
AT&T is in the midst of a restructuring at WarnerMedia that has seen the heads of HBO, Turner Broadcasting and Warner Brothers leave this year.
AT&T’s plans for a sale and leaseback deal surfaced in January and attracted pension funds, a sovereign wealth fund and real estate investment trusts. The losing bidders have been notified, the source said.
AT&T plans this year to shave $20 billion off its net debt of $171.3 billion, as reported at the end of 2018, with debt reduction a top company priority.
Reporting by Herbert Lash; editing by Susan Thomas and Sonya Hepinstall