A real estate investment group has agreed to pay nearly $3.95 billion for four Manhattan office towers, including the landmark General Motors building on Fifth Avenue.
The deal, one of the richest ever for New York City office space, was announced Saturday by Boston Properties, a publicly traded company led by publisher and real estate baron Mortimer Zuckerman.
Boston Properties said it and other, unnamed investment partners, would pay about $1.47 billion in cash and take on $2.47 billion in debt to acquire the portfolio from New York developer Harry Macklowe.
The portion of the sale related to the General Motors building would set a new record price for a U.S. office building.
The 50-story tower, built in 1968 at the southeast corner of Central Park, occupies a full city block and is best known as the home of two Fifth Avenue tourist attractions, the FAO Schwarz toy emporium and an Apple store with a glass-cube entrance inspired by the Louvre Museum in Paris.
Boston Properties didn't disclose an exact price for the building, but said the debt portion of the purchase alone would be $1.9 billion, which would exceed the previous record price of $1.8 billion set in 2006 by a 41-story building six blocks further south on Fifth Avenue.
The other buildings included in the sale are a 39-story tower at 540 Madison Avenue, a 23 story tower at 125 West 55th Street and the 44-story Two Grand Central Tower.
The gem of the package, though, is the GM Building, which has 2 million square feet of rentable office space in one of the most coveted locations in New York City.
Macklowe bought the tower for $1.4 billion in 2003 as part of a rapid, $7 billion expansion of his holdings in Manhattan, but ran into credit problems related to the deal and has been pressured into unloading several of the properties.
Other suitors for the GM building had included real-estate investors Joseph Cayre and Larry Silverstein.