Sony to Sell Its Manhattan HQ for $1.1B

by Christopher Freeburn | January 18, 2013 2:04 pm

Sony to Sell Its Manhattan HQ for $1.1B

sonyattbuildingnyc 175x300 Sony to Sell Its Manhattan HQ for $1.1B[1]An investment consortium led by The Chetrit Group outbid more than 20 rivals to buy Sony’s (NYSE:SNE[2]) U.S. headquarters building, located in New York City, for $1.1 billion, though Sony will continue to occupy its current office space[3] at least for a while.

News of the deal sent Sony shares surging more than 6% in Friday afternoon trading.

The sale, whose financing has yet to be finalized, marks the biggest price tag for an office building in the U.S. since Google (NASDAQ:GOOG[4]) paid $1.8 billion for a complex in New York’s Chelsea neighborhood in 2010, Reuters noted.

The 820,000-square foot Sony tower, originally built by AT&T (NYSE:T[5]) and located on Madison Avenue in midtown Manhattan, includes both office and retail space. Sony purchased the building two decades ago for $236 million.

Sony will lease its office space from the new owners for at least three years while it examines relocation options. The deal should be completed by March. Sony indicated that it will realize net cash proceeds of about $770 million after retiring debt linked to the building.

The Japanese electronics giant has been moving to cut costs as it restructures its operations under pressure from rivals[6] like Apple (NASDAQ:AAPL[7]) and Samsung. It is also looking to sell one of its Tokyo office buildings for as much as $1.14 billion.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2013/01/sonyattbuildingnyc.jpg
  2. SNE: http://studio-5.financialcontent.com/investplace/quote?Symbol=SNE
  3. Sony will continue to occupy its current office space: http://www.reuters.com/article/2013/01/18/sony-building-idUSL4N0AN1NL20130118
  4. GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
  5. T: http://studio-5.financialcontent.com/investplace/quote?Symbol=T
  6. cut costs as it restructures its operations under pressure from rivals: http://investorplace.com/2012/12/stick-a-fork-in-japanese-electronics-manufacturers/
  7. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL

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