Sony Sells Headquarters in the US, Recoups Much Needed Income
Today announced Sony Corp.’s American subsidiary to sell its New York City headquarters to a consortium led by The Chetrit Group for $1.1 billion.
The 37-story building at 550 Madison Avenue has about 825,000 square-feet of office space and a 30,000 square-foot annex. The deal, which is scheduled to complete in March this year, will net around $770 million in cash, and boost Sony’s operating income by $685 million.
The leaseback agreement has meant that Sony divisions will continue to stay in the building for up to 3 years, time to keep things in operation in the short term and search for a new building to lease for their HQ relocation in Manhattan.
For Sony, the operating income boost of $685 million will provide some much needed cash reserves as more than a decade of consecutive losses for the overall business has seen it’s reserves dwindle and stock price plummet by almost 50% less than a year.
Growing competition in Sony’s key businesses has also led to tough conditions and poor financial performances in the gaming, TV and smartphone business. Faced also with a tough economic climate where Sony like to pride themselves on premium quality, the road ahead continues to look tough.