Fried Frank, Paul Weiss Lead on Time Warner Center Sale
Almost a decade after opening on Columbus Circle across from the southwestern edge of New York City’s Central Park, the Time Warner Center is set to be sold by its namesake inhabitant to an investor group that helped construct the 55-story edifice.
Time Warner Inc., the world’s third-largest media conglomerate, announced Thursday that it plans to move its headquarters to a new development on Manhattan’s West Side, and will unload the 1.1 million square feet of space it owns at the landmark office tower to a group led by developer the Related Companies and the sovereign wealth funds of Abu Dhabi and Singapore, according to sibling publication GlobeSt.
Fried, Frank, Harris, Shriver & Jacobson and Paul, Weiss, Rifkind, Wharton & Garrison—two Am Law 100 firms well versed in matters involving Manhattan’s pricey commercial real estate world—are taking the lead advising New York–based Time Warner on the deal.
As The Am Law Daily reported in 2010, both Paul Weiss and Fried Frank also played roles in the signing of a finance agreement for the $15 billion Hudson Yards site, where Times Warner's new headquarters will be located. Hudson Yards is being developed by Related—a real estate company owned by billionaire Stephen Ross—and Oxford Properties Group, the real estate investment arm of the Ontario Municipal Employees Retirement System pension fund.
Fried Frank has been advising Related on various aspects of the Hudson Yards development, including land use approvals, the construction of a 750,000 square foot condominium unit and lease transactions with tenants such as L’Oreal and SAP.
Stephen Lefkowitz, a Fried Frank real estate partner who took the lead on many of those deals, also advised Time Warner more than a decade ago when it was developing its new headquarters at Columbus Circle in the wake of what proved to be its disastrous $182 billion merger with AOL.
The ill-fated union was unwound in 2009—Cravath, Swaine & Moore, which reaped $35 million from the initial merger, took the lead role on the breakup—and Time Warner will now lease space at its Columbus Circle building under an arrangement set to run through 2019. Over the past decade, the Time Warner Center has become one of Manhattan’s most valuable commercial, residential and retail properties.
Under the terms of the deal announced Thursday, Time Warner will sell the space it owns at the site, and commit to relocating its headquarters within the next five years to a new skyscraper being built at 30 Hudson Yards. The 80-story tower is part of the largest private real estate project in U.S. history.
In addition to Lefkowitz, other Fried Frank lawyers advising Time Warner in connection with the matter include real estate partner Harry Silvera and tax partner Brian Kniesly. Former Kirkland & Ellis partner Paul Cappuccio is Time Warner’s general counsel.
Paul Weiss, which represented New York’s Metropolitan Transportation Authority on a 99-year lease with Oxford Properties for the Hudson Yards site four years ago, has been tapped by Time Warner to advise on an incentive package provided by New York's city and state government's to help fund the company's massive Manhattan move.
Real estate partner Meredith Kane—a member of Paul Weiss’ management committee—and real estate chair Steven Simkin are advising Time Warner on certain aspects of the transaction, along with counsel Allan Wieder and Barry Langman. The firm has enjoyed a longtime relationship with Time Warner, having handled the $ 9.25 billion spin-off of former subsidiary Time Warner Cable in 2008. (Paul Weiss is also taking the lead for Time Warner Cable the $61 billion takeover bid it received from Charter Communications earlier this week.)
With Fried Frank advising Time Warner this time around, Related has turned to Gibson, Dunn & Crutcher for counsel on its acquisition of the Time Warner Center in tandem with the Abu Dhabi Investment Authority and the Government of Singapore Investment Corp. Eric Feuerstein, chair of Gibson Dunn's New York real estate practice, is working on the matter along with real estate partners Andrew Dady, Drew Flowers and Matthew Kidd.
Skadden, Arps, Slate, Meagher & Flom real estate partner Nancy Olson, tax partner David Polster, tax counsel Karen Lee and associates Matthew Berry and Christine Szafranski are leading a team from the firm representing GIC on its portion of the Time Warner Center purchase. GIC's general counsel is Chua Lee Ming.
Kirkland is advising ADIA on the matter, while Sidley Austin has secured a role counseling Deutsche Bank, the lender arranging financing for the deal.
Gibson Dunn and Schulte Roth & Zabel are collectively representing Related and Oxford Properties on the proposed relocation of Time Warner to 30 Hudson Yards. That agreement has not yet been finalized and it has not been disclosed how much Time Warner has agreed to pay to move into the new building. (Robert Aziz serves as general counsel for Oxford Properties, while Glenn Goldstein is the top in-house lawyer at Related.)
The sale of the Time Warner Center is the latest major skyscraper sale to be announced in Manhattan over the past year and another sign that the relatively fallow period for real estate transactional work that was once a hallmark of the era prior to the global economic downturn five years ago.
The Am Law Daily reported last year on DLA Piper and Proskauer Rose’s role handling the $725 million sale of One Chase Manhattan Plaza to a Chinese buyer, as well as Skadden and Greenberg Traurig teaming up a year ago this month to advise on the $1.1 billion sale of Sony’s Manhattan headquarters.