ZUCKERMAN'S REIT STUFF
MORT ZUCKERMAN, BEST known as a publishing magnate, earned his original fortune in real estate. Now, Zuckerman is about to take his property empire public, say people familiar with the deal. Wall Street analysts expect his Boston Properties will raise $400 million-plus by becoming a real estate investment trust (REIT).
Boston Properties hasn't filed the offering yet. But sources say Zuckerman (owner of U.S. News & World Report, the New York Daily News, and the Atlantic Monthly) intends to stay on as head of the real estate outfit he founded in 1970, retaining an unspecified controlling interest. The fresh capital will go mainly toward expanding Boston Properties' holdings, now 12 million square feet. This is mainly Class-A office space with high occupancy rates in Boston, New York, and Washington. Its flagship is in Manhattan--the 47-story, aqua-colored tower at 53rd Street and Lexington Avenue whose chief tenant is the Shearman & Sterling law firm.
REITs are hot now, so this is a propitious time to go public. In 1996, their average total return was 35%, vs. 22.9% for the S&P 500. Numerous private real estate concerns are taking advantage of this and converting to REITs lately, with Zuckerman's among the largest.
EDITED BY LARRY LIGHT
Updated June 15, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.