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CME sells Nymex building for $200 million, to lease trading floor

Traders work on the floor of the New York Mercantile Exchange, September 30, 2008. REUTERS/Lucas Jackson
Traders work on the floor of the New York Mercantile Exchange, September 30, 2008. REUTERS/Lucas Jackson

(Reuters) - CME Group Inc said on Tuesday that it had sold the home of its New York Mercantile Exchange for $200 million and would lease back the trading floor and some office space for a term of 15 years.

Brookfield Office Properties Inc bought the 15-story, half-million-square-foot office building in lower Manhattan, CME said in a statement. Brookfield also owns the neighboring Brookfield Place, formerly the World Financial Center.

"CME Group remains committed to our floor-based membership and open outcry trading services in New York, which continue to serve our customers well," said Kevin Lennon, the company's managing director of real estate.

Nymex offers trading in futures on oil and metals.

The building's sale sets the stage for CME to offer a special dividend that could reach $2 per share, said Rich Repetto, an analyst for Sandler O'Neill.

Proceeds from the sale amount to about 36 cents per share, assuming a 40 percent tax rate, he said.

The sale reflects the shift to electronic trading that has made it less attractive for exchange operators to own real estate for traditional open-outcry pits.

CME last year sold most of its historic Chicago Board of Trade building to a consortium of real estate companies for $151.5 million and leased back the space that houses its grain-trading pits.

CME shares were down 0.1 percent at 82.21. Brookfield Office Properties was up 0.12 percent at 20.24.

(Reporting by Ann Saphir and Tom Polansek; Editing by Lisa Von Ahn and David Gregorio)

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