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Times owner picks building brokers

July 30, 2008|Roger Vincent | Times Staff Writer

Two New York commercial real estate brokerages have been selected by Tribune Co. to market the Los Angeles Times' main office downtown and Tribune Tower in Chicago to potential buyers, the company said Tuesday.

Cushman & Wakefield will look for buyers for The Times' historic headquarters at 1st and Spring streets, and Eastdil Secured will try to sell the landmark Tribune building overlooking the Chicago River, said Stephanie Pater, director of real estate for Tribune.

Prices for the properties have not been set, Pater said, but the Times headquarters was valued at about $150 million and Tribune Tower might garner about $230 million, according to industry trade publication Real Estate Alert.

Tribune has not signed formal contracts with the brokerages, Pater said, but they are expected to accept the assignments. The firms were among several that responded to Tribune's request for marketing proposals last month.

"Both Tribune Tower and Times Mirror Square are iconic structures," Tribune Chief Executive Sam Zell said in a June memo to employees. "But they are also underutilized, and as employee-owners, it's in our best interests to maximize the value of all our assets."

The former Times Mirror Square, diagonally across from City Hall, has 750,000 square feet of usable space. It is a collection of five interconnected structures built between the 1930s and the 1970s. Its Civic Center location might make it attractive to government agencies, real estate observers say.

Tribune Tower, completed in 1925, was one of the first Chicago skyscrapers built north of the Chicago River. The neo-Gothic-style building is 40 floors tall with 940,000 square feet of usable space and has an adjacent parcel of land, about an acre in size, that is used as a surface parking lot.

Cushman & Wakefield has a substantial presence in L.A. Its brokers Carl Muhlstein and Michael DeSantis represented Tribune in the $125-million sale of its Hollywood studios in January. Muhlstein declined to comment Tuesday.

Eastdil Secured, a subsidiary of Wells Fargo Bank, is an investment bank as well as a brokerage and has been involved in several high-profile real estate transactions in recent years. A company representative could not be reached.

Commercial real estate investment sales have slowed in recent months as banks tightened credit and the economy faltered, making the potential sales more challenging than they would have been a year ago. Zell vowed to employees in his memo, "I can assure you that we will not accept anything but full market value" for the properties.

Tribune already has sold Newsday, its paper on Long Island in New York. Cablevision Systems Corp. said Tuesday that it had closed its $650-million purchase of the daily.

Cablevision agreed in May to buy 97% of Newsday Media Group, leaving the rest with Tribune to give that company a more favorable tax treatment. Tribune is selling assets to service debt it incurred in an $8.2-billion buyout led by real estate mogul Zell last year.


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