Sony's Thinking about Selling their US HQ building

[Ps360]

EXCLUSIVE: Sony weighing sale of skyscraper that houses its US headquarters at 550 Madison Ave. in New York - NYPOST.com

Sony Corp., struggling to rebound from a record loss, is weighing options for its iconic Midtown skyscraper, including a potential sale, The Post has learned.

The Japanese electronics giant recently held talks with private-equity firm Blackstone Group about a potential real-estate transaction involving 550 Madison Ave., sources said.

While those talks ended without a deal, Sony is said to be considering all options for the 37-story tower that houses its US headquarters. Those include consolidating in less space and leasing the remainder, selling the building and then leasing back a portion, or selling it outright and moving to another location, sources said.

Sony executives did a walk-through at a 479,008-square-feet space in the Blackstone-owned former New York Times building in Times Square, according to sources. Blackstone’s real estate agents at Newmark Grubb Knight Frank have previously said the refurbished space could include naming rights. There are also 25,000 square feet of roof decks and terraces on six floors.

The owners are hoping to make the former Times building a hub for media and tech companies.

In addition to Sony, Microsoft and Viacom have also toured the space.

One source close to Sony said the company had toured the Times Square building as a possible location for housing some staff but had already taken a pass on it.

The Sony Building, formerly the AT&T Building, is worth between $700 million and $1 billion, according to sources familiar with the structure.

“It’s a big asset on their balance sheet,” said one real-estate executive who declined to be identified.

Spokesmen from Sony and Blackstone and a spokeswoman for Newmark Grubb Knight Frank declined to comment.

One of the most noticeable skyscrapers in the city, the building, designed by noted architect Philip Johnson, is renowned for its trademark top, which has been likened to a Chippendale highboy.

Sony Music Corp. moved into the sprawling complex in 1992 after purchasing the building from AT&T. The Japanese giant later built a technology lab in the base along with a two-story flagship store to hawk its latest technological innovations.

Sony wholly owns the building, which now houses its movie and music divisions — Sony Music, Sony/ATV and Sony Pictures — as well as its corporate offices.

While its US entertainment assets are successful, Sony, the one-time force behind the Walkman, has lost its electronics edge to rivals Apple and Samsung.

In April, the Tokyo-based company, under new CEO Kaz Hirai, said it would cut 10,000 jobs, or 6 percent, of its global work force in a bid to return to profitability. Sony posted a record $5.7 billion loss in the fiscal year ended in March.

Hirai, who took over the company from long-time chief Howard Stringer, has said there is “no sacred area” as he looks to stem losses and restructure the company to become more competitive.

Sony’s US shares, which hit a 52-week low of $12.65 on June 1, are down 27 percent year-to-date and 46 percent in the past year. The stock rose 2.4 percent yesterday to $13.07.

[SplatterScoggs]

Hrm... whats your take on this PS360? You think it impending downsizing on Sony's behalf? You seem really informed on things like this. I think they'll recover, and if getting rid of this property helps, then so be it...

[Ps360]

Hrm... whats your take on this PS360? You think it impending downsizing on Sony's behalf? You seem really informed on things like this. I think they'll recover, and if getting rid of this property helps, then so be it...

well sony's bleeding money like they broke a main artery.


they seriously need to cut off some shit. I wouldn't be suprised if the Playstation 4 was the last playstation.

[nevetsteven2]

Sony’s US shares, which hit a 52-week low of $12.65 on June 1, are down 27 percent year-to-date and 46 percent in the past year. The stock rose 2.4 percent yesterday to $13.07.
THATS NOT GOOD.. SONY SELL THAT BLDG

[APriceless]

I don't think Sony has a choice but to sell the building.

[Schism]

It really doesn't matter to me what they do.

[XxHuskiesMoonxX]

I don't think the Playstation 4 will be the last Playstation but they do need to do something.

[terabyter9000]

Hey, what ever it takes to keep Sony Playstation brand alive.

[DaRe_xLw]

At this point as long as Sony keeps themselves alive, I'm happy, even if it means selling their building and their homemade cookies.

[thedevilsminion]

Actually it only makes sense to sell, when a company is on top they make investments this building is just that an investment, now when the said company has made some bad choices over the years and loses profitability then it can turn to the assets it accrued while they were on top. Sony is not going anywhere and to even suggest the end of the most profitable brand of sony the playstation brand is laughable.

Why would they stop making profitable consoles instead of stop making tvs and cameras and mps players thats where there losing there shirts,

Sometimes a company can grow to big exponential growth can't go on forever so they retract to the point where there profitable and start trying to gain market share again, this time stream lined and less redundant

[thedevilsminion]

Oh yeah in a year when the Vita is catching up on the 3DS and Sony actually makes money on the Vita, the same is happening with Nintendo selling there 3DS below cost is killing there bottom line so if Sony can get the Vita moving which it finally posted much stronger sales in Japan and they can lose there tv brand things will be good

[C_34_M]

They should probably sell it since it houses Sony music and movies, not their most profitable divisions. Sony will be around for a while

[Nagflar]

Oh yeah in a year when the Vita is catching up on the 3DS and Sony actually makes money on the Vita, the same is happening with Nintendo selling there 3DS below cost is killing there bottom line so if Sony can get the Vita moving which it finally posted much stronger sales in Japan and they can lose there tv brand things will be good

They won't be able to sell the Vita that much until they actually release games that the public cares about. New and original IPs are good, but they don't bring the sales. Long-standing and well-known franchices do. They need a Monster Hunter.

[BadWolf2142]

New and original IPs are good, but they don't bring the sales. Long-standing and well-known franchises do. They need a Monster Hunter.

I can't fully agree with that statement because if it wasn't for the release of Infamous then I probably would never have bought a PS3.

Back on topic.

When a company can quite easily set up a managed property fund, transfer all the real estate the company owns into the property fund and lease it back from the fund, then sell units/shares in the managed property fund on the market (either partially or wholly) to everyday investors, hence freeing up capitol for the company to use in it's core business (in this case, consumer technology goods) and allowing them the flexibility to move premises much quicker if needed, it doesn't make a lot of sense for a company to hold on to the real-estate it uses, or to sell it via a real-estate agent.

Property funds like this already exist on the stock market and as investment products sold through financial institutions. These kind of investment products are quite popular with investors ranging from small to institutional investors as they offer a good combination of a secure investment with good returns.