• The Wall Street Journal, Tuesday, March 10, 2009 9:33 AM

New York Times Co. has raised $225 million in a sale-leaseback of its share of its 52-story Manhattan headquarters building, gaining some much-needed debt relief. The company has more than $1 billion in debt maturing in the next couple of years.

Real-estate investment firm W.P. Carey & Co. is buying the 21 floors in the building occupied by the newspaper, and will lease the space back for to it for up to 15 years. The paper can buy the space back in 2019 for $250 million.

The deal helps the publisher effectively build a financial bridge to 2011, albeit at a cost. In January, it received a $250 million loan from Mexican billionaire Carlos Slim, with a 14% interest rate, and the leaseback agreement calls for the company to pay $24 million in rent in the first year. The initial rent is within the market rate, though rent payments will increase in later years. Times Co. owned a 58% stake in the headquarters building, which was completed in 2007.

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