Boston Properties To Buy 49.8% Stake In Colorado Center In Santa Monica

(RTTNews) - Boston Properties, Inc. (BXP) said that it has signed a binding agreement with real estate funds managed by Blackstone, through its investment in Equity Office Properties, to acquire a 49.8% interest in an existing joint venture with Teachers Insurance and Annuity Association or "TIAA" that owns the fee interest in Colorado Center in Santa Monica, California. The agreed upon gross value for the 49.8% interest is approximately $511.1 million and Boston Properties expects to pay the purchase price using existing cash balances. Boston Properties will be the managing partner of the joint venture. There is currently no debt on the property.

Boston Properties estimates that the acquisition will increase its projected 2016 diluted Funds from Operations by approximately $0.05 per share. Boston Properties anticipates the ability to increase the net operating income from the property through the lease-up of approximately 370,000 square feet of currently vacant space, as well as the roll-up of in-place, below-market rental rates to market rental rates as leases expire. Boston Properties believes that current market rental rates are approximately $10 per square foot greater than the weighted-average rental rate on in-place leases.

The closing of the acquisition is subject to customary conditions and termination rights for transactions of this type and is expected to occur in July 2016. The Company has posted a $25 million deposit.