Sony Corp. is considering the sale of its Philip Johnson-designed U.S. headquarters tower in midtown Manhattan, according to a memo from a senior executive.
The Tokyo-based company is “beginning to talk with people in the real estate community” about the potential sale of 550 Madison Ave., Nicole Seligman, president of Sony Corp. of America, said yesterday in a memo to employees. Sony bought the 36-story skyscraper on East 55th Street, known for its “Chippendale” top with a notch in the center, from AT&T Inc. in 2002, according to the memo.
“The building has considerable value locked in it, given its location and iconic design,” Seligman wrote. “Combine that with the current real estate market conditions in New York and interest rates, and it’s wise to at least explore our options in the coming weeks and months.”
A sale would take advantage of rising values for New York real estate. Yields on Manhattan office properties have slid to less than 5 percent, close to a post-recession low, after peaking at 6.5 percent in April 2010, according to data from Real Capital Analytics Inc. Pricing for the Sony tower could approach $1,000 a square foot, a level few buildings have exceeded since the 2008 credit crisis caused values to slide, said Dan Fasulo, a managing director at the research firm.
“It’s one of those unique corners in Manhattan that never comes up for sale,” Fasulo said in an interview. “It’s a cliche, but it’s one of those generational opportunities.”
The pricing would depend on whether Sony leaves the building or remains in the property as a renter, Fasulo said. Sony is undecided on whether it would stay in the tower if it is sold, Seligman said in the memo.
The company is “exploring all possible options” with regards to the building, George Boyd, a spokesman, said in an e-mail.
Sony, Japan’s biggest exporter of consumer electronics, is seeking to return to profitability after four consecutive annual losses under Chief Executive Officer Kazuo Hirai. The New York Post reported the potential tower sale earlier today.