{"id":1004058048,"date":"2013-01-21T08:39:19","date_gmt":"2013-01-21T16:39:19","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004058048"},"modified":"2022-12-08T09:49:22","modified_gmt":"2022-12-08T17:49:22","slug":"sony-to-sell-manhattan-hq-to-chetrit-partners-in-1b-sale-leaseback","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/sony-to-sell-manhattan-hq-to-chetrit-partners-in-1b-sale-leaseback\/","title":{"rendered":"Sony to Sell Manhattan HQ to Chetrit, Partners in $1B Sale-Leaseback"},"content":{"rendered":"<p><em>By Barbra Murray, Contributing Editor<\/em><\/p>\n<p><a href=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/01\/550-Madison-2.jpg\"><img loading=\"lazy\" decoding=\"async\" data-attachment-id=\"1004058090\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/sony-to-sell-manhattan-hq-to-chetrit-partners-in-1b-sale-leaseback\/550-madison-2\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/01\/550-Madison-2.jpg\" data-orig-size=\"456,800\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;}\" data-image-title=\"550 Madison &#8211; 2\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/01\/550-Madison-2.jpg?w=456\" class=\"alignleft size-medium wp-image-1004058090\" title=\"550 Madison - 2\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/01\/550-Madison-2.jpg\" alt=\"\" width=\"171\" height=\"300\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/01\/550-Madison-2.jpg 456w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/01\/550-Madison-2.jpg?resize=171,300 171w\" sizes=\"auto, (max-width: 171px) 100vw, 171px\" \/><\/a><\/p>\n<p>With commercial real estate investment brokerage and banking firm Eastdil Secured leading the marketing effort, Sony Corporation of America has settled on a buyer for its Manhattan headquarters building at 550 Madison Ave. Acting as 550 Madison Fifth L.L.C, a consortium spearheaded by commercial property owner The Chetrit Group won the bid to acquire the 850,000-square-foot high-rise and will fork over $1.1 billion to close the sale-leaseback transaction. The group was not the only one that was willing to shell out a billion-dollars-plus.<\/p>\n<p>&#8220;It was a wonderful process I must say,&#8221; Benjamin V. Lambert, chairman of Eastdil, told <em>Commercial Property Executive<\/em>. &#8220;We started with a truly magnificent piece of real estate&#8211;Philip Johnson created a real icon at 550 Madison&#8211;so it was not difficult to sell. Our own reading of the market indicated that there would be enormous interest.&#8221;<\/p>\n<p>And so there was&#8211; approximately 22 bidders, serious bidders in the form of national and international real estate owners and developers, came forward with offers meeting or exceeding the set $900 million minimum.\u00a0But it wasn&#8217;t just about a commitment to cough up the big bucks for the three-decade-old office destination.<\/p>\n<p>&#8220;The other issue was the certainty,&#8221; said Lambert. &#8220;We wanted to know that there was serious capital&#8211;ready capital, deep-pocket capital, conversant capital&#8211;so we could assure the client that we were dealing with groups that would end up being able not only to put up the rather large deposit, but also to close.&#8221; With that criterion in mind, Eastdil whittled down the proposals to seven.<\/p>\n<p>Sony, which has called 550 Madison home since 1992, had acquired the 37-story tower from AT&amp;T in 2002 for a reported $236 million.\u00a0The company has since submitted the Midtown Manhattan building to upgrades, including the multi-million-dollar redevelopment of its 14,000-square-foot entertainment museum, the Sony Wonder Technology Lab, in 2009.<\/p>\n<p>After all is said and done, Sony will pocket approximately $770 million on the deal with Chetrit and, as per terms of the sale-leaseback transaction, will continue to occupy the property for three years.\u00a0As Nicole Seligman, president of Sony Corporation of America, noted in an internal message to the company&#8217;s staff, &#8220;Given the opportunities and challenges in the current economic and real estate landscape, selling 550 Madison now is a timely and logical strategic move.&#8221;<\/p>\n<p>The sale is on track to close in March of this year.\u00a0In the meantime, Sony is hunting for alternative digs. &#8220;Regarding our new headquarters, we continue to look at a number of spaces in Manhattan but have not yet made a decision about where to lease,&#8221; Seligman wrote. She did not specify the size requirements, but in terms of options, many big-space occupiers Midtown are staying put these days.<strong>\u00a0<\/strong><\/p>\n<p>&#8220;The trend of tenants renewing in place continued in [the fourth quarter of 2012], with renewal and renewal-and-expansion activity accounting for three of Midtown&#8217;s top five transactions,&#8221; according to a report by commercial real estate firm CBRE Group Inc., which, in the 1990s, facilitated Sony&#8217;s original lease agreement with AT&amp;T at 550 Madison. Last quarter, UBS Financial Services Inc. signed an approximately 890,000-square-foot renewal and expansion lease at 1285 Avenue of the Americas; law firm Davis Polk &amp; Wardwell recommitted to 650,000 square feet at 450 Lexington Ave.; and Macy&#8217;s Inc. saw no reason to abandon its nearly 200,000 square feet at 1440 Broadway.<\/p>\n<p>Despite any challenges in the market, Lambert is confident in Sony&#8217;s ability to find exactly what the company desires in office accommodations &#8220;The people at Sony are extremely creative and very, very capable, and they&#8217;re great people,&#8221; he asserted.\u00a0\u00a0 With Eastdil having successfully orchestrated a mega-deal for the sale of 550 Madison, Sony has turned to another team to guide it through the searching process. However, that doesn&#8217;t mean that Eastdil is necessarily out of the game just yet. Lambert noted, &#8220;If we had a good idea, we wouldn&#8217;t hesitate to bring it to their attention. It&#8217;s not our responsibility but we would love to have the right idea.&#8221;<\/p>\n<p>A major office transaction is a fine way to kick off a new year, and the Sony office sale-leaseback may be one of many such contracts to come in 2013. &#8220;We&#8217;re very aware of several situations where something like what Sony is doing is being considered because we&#8217;re being asked to be involved,&#8221; Lambert concluded. &#8220;I think there are some [similar deals] that are very definitely being looked at right now.&#8221;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>With commercial real estate investment brokerage and banking firm Eastdil Secured leading the marketing effort, Sony has settled on a buyer for its Manhattan headquarters building at 550 Madison Ave.<\/p>\n","protected":false},"author":969,"featured_media":1004058090,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21783,11,1600,21742,21747],"tags":[],"class_list":["post-1004058048","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-investment","category-midatlantic","category-new-york","category-latest","category-office"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v24.6) - 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