Boston Properties, a real estate investment trust, has entered into a purchase and sale agreement with an affiliate of Harry Macklowe to acquire fee title to 510 Madison Avenue in New York City.

Under the agreement, at closing Boston Properties will acquire the property by paying a purchase price equal to the aggregate principal and accrued interest on the property's existing senior mortgage loan and senior mezzanine loan totalling approximately USD280.5m.

Previously, on 10 August 2010, the company had acquired for cash from a third party the junior mezzanine loan that was secured by a pledge of a subordinate ownership interest in the property for a purchase price of approximately USD22.5m.

Upon closing, Boston Properties will be the sole owner of the property.

510 Madison Avenue is a newly-constructed, vacant 350,000 square foot class A office tower located in the Plaza District of midtown Manhattan. The building was conceived and developed by Harry Macklowe of Macklowe Properties and designed by Macklowe, SLCE Architects and Moed de Armas & Shannon Architects.

Following the closing, Macklowe will serve as a project consultant and adviser and as co-chairman of the marketing and leasing advisory committee for the property, and he may be entitled to additional payments depending on the performance of the property. CB Richard Ellis, through Paul Amrich, will be maintained as the rental agent for the property.

Concurrently with the execution of the purchase and sale agreement, Boston Properties delivered a USD5.0m deposit, which at closing will be applied to the purchase price. The company will also be responsible for all transfer taxes incurred in connection with this transaction, as well as the company's other acquisition costs, which are estimated to be an aggregate of between USD12m and USD15m. The closing is scheduled to occur on 1 September 2010 and is subject to customary closing conditions.

Mortimer B. Zuckerman, chairman and chief executive officer of Boston Properties, says: "We are once again pleased to work with Harry Macklowe to acquire an office building with outstanding design in a premier location. Our previous relationship with Harry, which began with the acquisition of the General Motors Building and other assets in 2008, has fostered a productive relationship that helped us successfully acquire 510 Madison Avenue. 510 Madison Avenue is the only new office development in the Plaza District and, given its modern design and amenities, it is well positioned to attract the highest-quality tenants."