NEW YORK CITY-Sony Corp. of America said Thursday evening that it was in contract to sell its US headquarters at 550 Madison Ave. to a consortium led by the Chetrit Group. The sale price is $1.1 billion. SCA, as well as Sony Music Entertainment, Sony/ATV Music Publishing and Sony Pictures Entertainment, will remain at the 37-story office tower for at least three years under a leaseback deal with the buyers.
Eastdil Secured marketed the property on behalf of SCA. A sale of 550 Madison first surfaced as a possibility this past June after the electronics giant withstood a record loss of $5.7 billion worldwide in the previous fiscal year.
In a release, SCA says the sale was one of “a range of initiatives to strengthen its financial foundation and business competitiveness and for future growth. At the same time, Sony is balancing cash inflows and outflows while working to improve its cash flow by carefully selecting investments, selling assets and strengthening control of working capital such as inventory.”
The sale is expected to close in March, according to SCA. The company says it expects to receive net cash proceeds of about $770 million after repaying debt related to the building and other transaction costs. SCA expects to realize a gain on the sale of approximately $685 million to be recorded as operating income, and is reevaluating its forecast of the consolidated financial results for the current fiscal year that ends on March 31 to take the sale into account.
The 647-foot-tall 550 Madison was originally built for AT&T Corp. and opened in the 1980s. Sony, which had begun moving its businesses into 550 Madison in the 1990s, bought the property outright for $236 million in 2002.