Reader's Digest Seeks Sale/Leaseback on HQ Campus

Company officials say that firm plans to keep a portion of the space to accommodate its current headquarters staff of 800 workers. Reader's Digest has hired Cushman & Wakefield as its broker to market the facility. C&W's senior director Maureen O'Boyle and Mitch Konsker, executive vice president of C&W in New York City, are working on the assignment.

"This approach is the best for Reader's Digest, its shareholders and its employees," says Thomas O. Ryder, chairman and chief executive officer of Reader's Digest in announcing the plan. "It will enable us to 'monetize' an underutilized asset, in the process strengthening the company's financial condition and improving shareholder value. For our employees, it means continuing to be based at our historic headquarters, which has been home to Reader's Digest for 65 years. For Westchester, it means we can continue our role as a leading county employer and corporate citizen."

Reader's Digest officials note that over the past few years the company determined that the Chappaqua property was far larger than its headquarters operations required. Management had considered subletting the excess space or selling the facility and moving to a new location before deciding on the sale/partial leaseback option.

C&W's O'Boyle says that no sale price has been set as yet for the property that was built in 1939 by Reader's Digest founders DeWitt and Lila Wallace. A marketing plan is being formulated but potential buyers could be investors and or corporate users, she adds. O'Boyle says, "I expect a quick sale. This is a magnificent property that has a lot of history," O'Boyle says.

Reader's Digest officials say the plan calls for securing a sale/partial leaseback with a term of at least 20 years. At present, company officials state the firm only requires less than half of the 690,000 sf available at the property.

In addition to Reader's Digest, Kunhardt Productions leases approximately 7,000 sf at the Chappaqua complex.

While the Westchester County office market has seen some large lease transactions of late, the Reader's Digest announcement and the decision by the Altria Group to put its Rye Brook complex on the market for sale are sure to spike the county's office availability rate higher at least for the short term. The two properties could bring more than 950,000 sf of available space to the Westchester office market sometime later this year.