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CHAPPAQUA, NY-The $59-million sale/partial leaseback of the 114-acre corporate headquarters campus of the Reader’s Digest Association, Inc. closed last week. Officials with the storied publishing house received $49 million at closing from the buyer, a joint venture of South Norwalk, CT-based Summit Development LLC and Greenfield Partners LLC.

Reader’s Digest will receive an additional $10 million from the buyer two years from now. Officials with Reader’s Digest also note that it signed a 20-year renewable lease for a portion of the property. Although no firm figure on the size of the lease were released, Reader’s Digest will likely lease back a little less than one-third of the corporate headquarters building. The company will be looking to “restack” the portions of the building it intends to continue to use as its corporate headquarters in the next 12 months. The building, which totals approximately 700,000 sf, was built in 1939 with additions constructed in the 1940s, 50s and 60s, company officials say.

Cushman & Wakefield’s Maureen O’Boyle, who works out of the brokerage firm’s Stamford, CT offices, as well as Mitchell Konsker, Michael Rotchford and Margery Westcott of C&W’s New York City offices represented Reader’s Digest.

Reader’s Digest had been reviewing options for its headquarters property, located in Chappaqua, a hamlet of the Town of New Castle, for the past two years. The firm currently has 800 employees housed at the complex, down from the 1,800 workers 10 years ago. Reader’s Digest expects that the sale/leaseback deal will reduce its costs by $10 million per year.

Felix Charney, principal of Summit Development, said when the sale/partial leaseback deal was announced a month ago, that while no firm development plans have been formulated, “number one on its list” will be the development of some sort of age-restricted housing on the property. The housing could be new construction as well as conversion of some of the existing office space. Thompson says the Summit/Greenfield partnership will look to begin discussions with the community and local government officials in early 2005.

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