BXP Markets 7 Times Square Ground Lease in Move to Unlock Value

BXP is moving to sell the ground lease for 7 Times Square, a significant transaction that could illuminate investor demand for Manhattan office assets in a shifting landscape. The firm has retained Eastdil Secured to manage the marketing of the 1.2 million square-foot property, aiming for a price point between $700 million and $750 million.

Located on a full block bounded by West 41st and West 42nd streets and Broadway and Seventh Avenue, the tower—also known as Times Square Tower—was developed in 2004. The asset currently operates under a 99-year ground lease that began in 1990 and includes an option to purchase the site from the city. According to industry reports, the building is 91 percent occupied, with roughly 100,000 square feet of availability remaining on the upper floors, which typically command the highest rents.

The proposed price tag sits slightly above the $684 million that Norges Bank Investment Management paid in 2013 for a 45 percent stake in the property, a deal that valued the building at $1.52 billion at the time. If the ground lease fetches the asking price, it would rank among a select group of office transactions; data indicates that only nine single-property office buildings have traded for at least $700 million since 2020.

The sale comes as the surrounding Times Square submarket undergoes a mix of asset repositioning and conversions. Nearby, RXR is converting 5 Times Square into residential housing, while SL Green Realty is exploring turning 1515 Broadway into a hotel. These shifts in usage highlight the broader recalibration occurring in New York City’s commercial districts.

As of the latest market close, BXP is trading at $68.49, representing a decline of 1.45 percent. The company, a major player in the office REIT sector with a focus on gateway markets including New York, continues to manage its portfolio amid changing office utilization trends.

What to watch

• Bids for the ground lease are expected shortly.
• Upcoming guidance from BXP regarding asset recycling and capital deployment.

Source: original release