GM Building Deal Could Close Next Week, FAO Schwarz May Get Booted

Mort Zuckerman doesn't screw around.

His Boston Properties could close as early as next week on its $2.8 billion purchase of the GM Building, according to Reuters.

Just as intriguing, Reuters is reporting that Boston Properties is considering buying out the remainder of FAO Schwarz's lease on the ground floor, and the leases of other below-market tenants:

Toy store FAO Schwarz also may not be long for the location. It pays $70.63 per square foot for more than half the 66,465 square feet of retail space it rents, when market rates are well over $1,000 per square foot. Its lease ends in 2012.

"FAO Schwarz ultimately will probably not be the most economically viable potential tenant we have for the space over time," [Boston Properties President Douglas] Linde said [in a speech to the annual National Association of Real Estate Investment Trusts Forum in New York].

The GM Building carried the biggest purchase price for a single real estate asset in history. Even so, the announcement that Mr. Zuckerman had clinched the deal on the marble-and-black-glass tower over Memorial Day weekend marked an anti-climactic denoument of a many-months-long marketing of the tower by Macklowe Properties, which was forced to sell the building to pay off hungry creditors.