Time Warner said to be near sale of headquarters, move to Hudson Yards

By Liana B. Baker

(Reuters) - Time Warner Inc is in talks to buy a new world headquarters by the Hudson River in Manhattan and to sell its current space to real estate developer Related Cos for what could be more than $1.3 billion, two sources said on Monday.

Time Warner is also speaking to other parties interested in buying its current headquarters if talks with Related fall apart, said one of the people who is familiar with Time Warner's thinking. Related helped build the company's current space near Manhattan's Central Park.

Both of the new buildings that Time Warner is considering buying are on the far west side of Manhattan, in a $12 billion development project known as Hudson Yards. Related Cos is one of the developers building office towers on the 26-acre site. Time Warner is also speaking to Brookfield, another developer at Hudson Yards.

Related and Time Warner have not agreed on the broad terms of any deal for the current headquarters in Midtown Manhattan or for the new building at Hudson Yards, the person said. Other parties are also interested in purchasing the Midtown headquarters and have spoken to Time Warner about it, the person said.

All of Time Warner's employees in 15 buildings in the New York metropolitan area would move to the new headquarters, including workers at the Turner networks unit, cable channel HBO and the Warner Brothers movie studio. Employees of Time Inc, the magazine unit that Time Warner plans to spin off by the end of the year, would not be part of that move.

The news was first reported by The Wall Street Journal.

The company's current headquarters is part of the Time Warner Center, which the company now known as AREA Property Partners and Related Cos finished in 2004.

A sale of the Time Warner headquarters would be the largest transaction for a single office building in New York since March when Sony Corp's New York headquarters was sold to the Chetrit Group for $1.1 billion. A team of brokers led by Doug Harmon of Eastdil Secured LLC led that sale.

Time Warner said in April it had hired Eastdil to market its 1.1 million square-foot (102,193 square-meter) headquarters.

Representatives from Eastdil, Related and Time Warner Cable declined to comment.

The developers began building Time Warner's headquarters overlooking Columbus Circle, at the southwestern edge of Central Park, soon after the media company announced its plan to combine with America Online in 2000. The development was originally to be known as the AOL Time Warner Center, but "AOL" was dropped by the time it opened in 2004.

The company's headquarters are in the south tower, which is topped with residential condominiums. The other tower houses condominiums and the Mandarin Oriental Hotel. They are connected by an upscale shopping mall. Time Warner owns only its headquarters.

(Reporting by Liana B. Baker; Editing by Leslie Adler)