Sony to sell US headquarters, will make $685 million
The Japanese electronics giant has been in the iconic Madison Avenue building for 20 years
Fri, January 18, 2013
IDG News Service (Tokyo Bureau) — Sony will sell its U.S. headquarters to raise US$685 million in cash, parting ways with an iconic New York building it has occupied for 20 years.
The Japanese electronics manufacturer, which has sworn to return to profitability after a record loss last year, said it will move out of the Sony Tower within the next three years. The sale is part of a global restructuring that also includes cutting thousands of jobs worldwide and shuttering factories at home.
The sale price for the property is $1.1 billion, and Sony will book its profits from the deal in its earnings for the current fiscal year.
Sony's U.S. headquarters, with its swanky Madison Avenue address in New York City and distinctive ornamental crown, is a famous part of the city skyline. The company also uses the building to boost its brand image, offering free admission to a four-story technology museum called the Sony Wonder Technology Lab.
The company first leased the property from AT&T in 1992 and spent millions upgrading, then bought it outright in 2002. At the time, Sony was trying to expand its business and reputation beyond electronics, acquiring the record and film companies that currently make up its entertainment holdings.
In a press release, Sony said the sale was made as part of "a range of initiatives to strengthen its financial foundation and business competitiveness and for future growth."
The building will be sold to a group of buyers led by commercial property management company The Chetrit Group. The deal is expected to close on March 15, and Sony said it will evaluate how profits from the sale affect its profit forecast for the fiscal year, which ends the same month.
Sony has forecast a net profit of AY=20 billion yen ($220 million) this year, which would be its first full year without a loss since the period through March 2008.