San Francisco-based real estate investment management firm MacFarlane Partners, in its largest urban redevelopment effort and investment to date, announced today that it is taking a key position in New York's new AOL Time Warner Center through a series of transactions. First, the company has agreed to purchase 49.5 percent of the retail space, non-AOL Time Warner Inc. office space and the center's parking structure from Apollo Real Estate Advisors and The Related Companies. Apollo and Related will retain ownership of the remaining portion of these properties.
The purchase price will not be set until January 31, 2005 when the transaction is complete, but its value is estimated to be between $425 and $500 million. AOL Time Warner Center is scheduled to open in the fall of 2003. Second, the MacFarlane Partners venture is acquiring a $359 million participating interest in the project's $1.22 billion GMAC Commercial Mortgage construction loan. The entire commercial mortgage loan on the project totals $1.42 billion.
Lastly, MacFarlane Partners is investing in a fund that will own and operate two of the restaurants and an upscale lounge bar in the center. The investment agreement includes the following components of AOL Time Warner Center: the retail venue, called The Shops at Columbus Circle, encompassing 347,000 leasable square feet of shops, restaurants, entertainment uses and grand public spaces, approximately 90 percent of which has already been committed; 211,000 square feet of Class A office space, to be called 60 Columbus Circle, which will offer expansive views of Central Park and the most advanced mechanical and technological amenities and services; and a parking garage offering 24-hour valet service and accommodating 504 cars in three below-grade levels. MacFarlane Partners' investment does not include other components of the development, such as 879,000 square feet of office space to be acquired by AOL Time Warner for its new world headquarters, Jazz at Lincoln Center, the Mandarin Hotel or 191 residential condominiums.
The investment does not include any investments in, or obligations to, AOL Time Warner. "MacFarlane Partners has a long, successful history of revitalizing urban areas and developing dynamic mixed-use properties that transform neighborhoods and communities into vital centers of growth and prosperity," said Chuck Berman, managing principal with MacFarlane Partners.
"The AOL Time Warner Center fills a missing, much-needed link between Times Square and the Upper West Side and is an example of successful revitalization in the grandest terms. This will be a landmark property that not only positively impacts surrounding neighborhoods, but will be recognized and appreciated worldwide as the ideal New York address for living, working, shopping, dining and visiting."
MacFarlane's portfolio at AOL Time Warner Center will include: * The Shops at Columbus Circle - a retail venue of 347,000 leasable square feet consisting of shops, restaurants, entertainment uses and grand public spaces. Approximately 90 percent of the space at The Shops has been committed. Tenants include: Hugo Boss, J. Crew, Cole Haan, A/X Armani, Stuart Weitzman, and LVMH's Sephora and Thomas Pink. The center also includes a 31,000-square-foot Equinox fitness center, and a Whole Foods upscale supermarket offering a 60,000-square-foot combination restaurant-market. * Class A office space of 211,000 square feet, which will offer expansive views of Central Park and provide first-class, state-of-the-art rental space for corporate tenants, including the offices of the development partners,
The Related Companies L.P. and Apollo Real Estate Advisors, L.P. * A parking garage offering 24-hour valet service and accommodating 504 cars in three below-grade levels. In addition, MacFarlane Partners is investing in a fund which will own and operate two showcase restaurants and an upscale lounge bar at AOL Time Warner Center: Chef Thomas Keller's encore to The French Laundry, his internationally renowned restaurant in California's Napa Valley; a world-class steakhouse presented by New York City's Jean-George Vongerichten, chef and owner of a number of New York City's most highly acclaimed restaurants including JoJo, Vong, Jean-Georges and The Mercer Kitchen; and nightclub owner Rande Gerber's latest creation.
"We welcome the addition of MacFarlane Partners' experience with urban retail and mixed-use urban core projects," said Stephen M. Ross, Chairman and CEO of The Related Companies. "They also bring a sensitivity to the surrounding community in which a large development like this resides. We expect this to be one of numerous deals we are pursuing with MacFarlane Partners across the country." "This is our first partnership with MacFarlane Partners and we hope to be able to pursue future opportunities with them," said William Mack, co-founder and managing partner of Apollo Real Estate Advisors. MacFarlane Partners' investment was made through a joint venture with CalPERS (California Public Employees' Retirement System).