Turns out all it costs for a 37-story building in Midtown Manhattan, a few blocks away from Central Park and the Plaza Hotel, is $1.1 billion. I mean, come on, that’s basically just one Instagram and change. If you can’t afford that, well, enjoy your trailer. You know, the one you keep in the parking lot across from the Arby’s. Or at least that’s where I like to keep mine on weekends.
That sweet, sweet cheesy smell.
Anyways, Sony Corporation of America has agreed to sell its New York-based US headquarters to real estate conglomerate The Chetrit Group for $1.1 billion, a plan that hopes to net the company somewhere in the neighborhood of $770 million after some business nonsense like transaction costs and outstanding building debts, a phrase that does not insinuate that there is a building mafia looking to break 550 Madison Avenue’s kneecaps.
The sale is planned to finalize in March of this year, though much of the company—including Sony Pictures Entertainment and Sony Music Entertainment—will continue to operate out of the building for another three years in a leaseback agreement while they search for a new Manhattan skyscraper to commandeer. This will make the cash influx work in favor of the fiscal year, coming in just before March 31 and turning their $223 million net profit forecast upwards after an expected $685 million operating-income gain from the sale. This is a massive turnaround from the previous year’s record $5.08 billion loss, the cap to four years of successive losses.
This is one of the better outcomes for Sony at this time. Last summer, the building was valued at between $700 million and a cool $1 billion, so this is actually above even those predictions. Of course, “given the opportunities and challenges in the current economic and real estate landscape,” as Sony Corporation of America president Nicole Seligman said to Bloomberg, the bump in price could be due to mild inflation and the mild mad dash for land nationwide.
Not to mention that this will infuse the company with, you know, actual cash, something they’ve been missing for a while now (you’ll recall the credit rating downgrade in November). Keita Wakabayashi, an analyst at Mito Securities Co., says, “It makes sense for Sony, as it’s no longer a cash-rich company. What matters is whether the company can use these proceeds to develop more attractive products.” This improved outlook as resulted in a bump in the stock market as the company closed up 12.2 percent yesterday, a four-year high.
And now someone’s gonna have to edit that Wikipedia entry.