Office REIT Columbia Property’s NYU Medical Center Lease “Very Significant,” CEO Says

Nelson Mills, president and CEO of Columbia Property Trust (NYSE: CXP), joined REIT.com for a video interview at REITWeek 2016: NAREIT’s Investor Forum at the Waldorf Astoria New York.

Columbia owns and operates class A office buildings concentrated in central business district locations, with more than half its portfolio in high-barrier-to-entry markets, including San Francisco, New York, Washington D.C., and Boston.

The company recently signed a 30-year lease in New York City with NYU Langone Medical Center for the entirety of its 25-story office tower at 222 East 41st Street.

Mills described the transaction as “very significant” in terms of Columbia’s overall portfolio.

“It was the largest near-term lease expiration in the portfolio, and we were very pleased with both the terms and the credit quality of the tenant. It made a major impact on our portfolio,” he said.

Mills said overall conditions in Manhattan are positive, with two of Columbia’s three buildings fully leased.  The company is also continuing to see “very strong activity” in San Francisco, with transactions exceeding expectations in terms of both pace and rate of leasing, he added.

Meanwhile, Mills said Columbia has only a few assets left to dispose of. The company began to transition its portfolio four years ago to high-barrier gateway markets, he explained. This has reduced the number of markets where Columbia operates from 32 to 12.