AT&T’s WarnerMedia has reportedly reached an agreement to sell its stake in the West Manhattan Hudson Yards office tower to project developer Related, for more than $2 billion, according to Bloomberg.
As part of the deal, Related would then lease back 1.5 million square feet of space in 30 Hudson Yards to AT&T for WarnerMedia to use under a 15 to 20 year term, unnamed sources told the media outlet. The skyscraper is one of a handful of new office towers planned for the $25 billion mixed-use development project, which is being built by Related, along with the Oxford Properties Group, on 28 acres in Manhattan.
In a Tuesday research note to investors Wells Fargo Senior Analyst Jennifer Fritzsche noted that AT&T disclosed that it holds a 50 percent interest in 30 Hudson Yards.
While the report has not been confirmed, Fritzsche said the real estate holding “had been top of the logical list of asset sales” and if accurate, the sale-leaseback “could represent a meaningful percentage” of AT&T’s plan to sell between $6 billion and $8 billion in assets this year to reach its leverage target.
“We believe the optics around asset sales should represent a boon for the T equity – as concern about the balance sheet (and high leverage taken on to complete Time Warner acquisition) has been a primary concern for many,” Fritzsche wrote.