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CMA
December 20, 2013  

Deutsche Wins Loan on Time Warner Center

Deutsche Bank has landed a roughly $700 million loan assignment on Time Warner’s headquarters at Columbus Circle in Manhattan.

The borrower, a joint venture led by New York developer Related Cos., will use the proceeds to help fund its $1.3 billion purchase of the 1.1 million-square-foot office condominium from Time Warner. Related has brought in Singapore’s sovereign wealth fund, GIC, as its partner.

The loan is an outgrowth of a larger transaction between Time Warner and Related, under which Time Warner will eventually relocate its headquarters from the mixed-use Time Warner Center to a new building that Related is constructing as part of its mammoth Hudson Yards project on Manhattan’s West Side.

Deutsche plans to securitize its five-year floater in a stand-alone deal in the first quarter. Citigroup was a finalist for the assignment.

The 2.8 million-sf Time Warner Center is configured as two 55-story towers connected by a low-rise atrium. Time Warner’s office and studio space is spread over both buildings and the atrium.

The rest of the complex is separately owned — 343,000 sf of retail space, the 250-room Mandarin Oriental Hotel and 225 luxury residential condos. In September, a partnership between Related Cos. and AREA Property of New York lined up a $450 million fixed-rate loan from MetLife and Pacific Life on the retail space, known as Shops at Columbus Circle. The collateral encompasses about 50 stores, including a 68,000-sf Whole Foods, plus several well-known restaurants and bars. Several hundred underground parking spaces also generate significant revenue. The Mandarin Oriental Hotel is controlled by Dubai’s sovereign wealth fund, Istithmar.

Related and AREA built Time Warner Center in 2004 at a cost of $1.8 billion and sold the office portion to the media giant. Now Related, in partnership with GIC, is buying back that portion. Time Warner has agreed to lease its space for five years, as its prepares to relocate to Related’s $15 billion Hudson Yards project, which is being constructed over railyards on the West Side. Time Warner has agreed to buy roughly half of the space in an 80-story skyscraper encompassing 2.4 million sf that will be built at West 33rd Street and 10th Avenue. The Related team started construction on a separate 47-story building this year.

Time Warner Center spans the western edge of Columbus Circle, at the southwest corner of Central Park. It fills two blocks between West 58th and West 60 Streets, from Eighth Avenue to Columbus Avenue.