News Article

Sony Selling Its New York Headquarters for $1.1 Billion

Posted by Sammy Barker

Chunk of change

In a move that has seen the company’s share prices surge by a whopping 12 per cent, Sony has announced that it has agreed to sell its New York headquarters to the Chetrit Group for a whopping $1.1 billion. The electronics manufacturer will continue to operate out of the 37-story building for the next three years, after which it will move into alternate premises.

The move represents the latest in a string of cost-cutting measures by the cash-strapped company, which has been selling assets and slashing jobs in order to pay off its debts. The Japanese giant expects to make a profit of around ¥20 billion ($223 million) for the fiscal window ending 31st March, following enormous losses in 2012. The sale of the building is speculated to bring in about $770 million after debt and other transaction costs. According to Bloomberg, the organisation is “re-evaluating its forecast of consolidated results for the year to reflect the sale”.

The building itself, located at 550 Madison Avenue, was previously the home of AT&T, before being taken over by Sony in 2002. Its new owners, the Chetrit Group, are a real estate firm, best known for acquiring the Willis Tower in Chicago, North America’s tallest building. Other assets in the firm’s portfolio include the famous Chelsea Hotel, which has hosted numerous high-profile residents over the years.

[via bloomberg.com, newyorkphotoblog.blogspot.co.uk]

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User Comments (7)

XCWarrior

#1

XCWarrior said:

Interesting move. in the end it's just a building, even if it is NYC. Still don't understand why they don't drop the price of the Vita and include a memory card with the purchases of it. Sales would improve a ton.

NathanUC

#2

NathanUC said:

Chetrit Group.. now I know the name of the people who ruined my beloved Sears Tower :(

@XCWarrior:
Reports indicate Vita is already sold at a loss. Selling more of them at a lower cost wouldn't help the situation in the short run. If they want to lower cost, they would need to release an alternate model with 'less' features.

Epic

#3

Epic said:

@XCWarrior
They are already selling it at loss.
I think sony tried to compensate the loss selling this kinda overpriced memory cards so its kinda hard to make a bundle with this things in mind, but I still agree it would improve the sells if it were possible.

XCWarrior

#4

XCWarrior said:

@Epic @nathanuc1988 Good to know, thanks guys.

Just had this thought, strengthened by what you guys said. Sony is not in a position to bring out a PS4 this year. They should be finally making a small profit when selling the PS3. PS4 would be sold at a loss, probably a big one if they want to have a competitive price to the Wii U. So I don't think we're going to see a new system from Sony this year.

get2sammybAdmin

#5

get2sammyb said:

@XCWarrior Haha, that would lose them more money! As has been mentioned, they need to wait for the price of components to drop before they can reduce the price. Besides, Sony's financial woes are not down to the Vita misfiring — that's just a small fish, really.

As for the PS4, they can't afford to squander any more market share to Microsoft. Obviously, they're going to have to be smart, but seeing as they recognise gaming as one of their "key pillars", I imagine they'll make the investment in PS4 this year if they deem it worthwhile. It's not like the PS3 will stop selling just because its successor is out.

NathanUC

#6

NathanUC said:

Also should remember the PlayStation branch of Sony is doing very well! It's their consumer electronics branch that has lost a lot of steam these past couple years.

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