Sony’s U.S. unit is selling its NYC headquarters to a group of investors led by Chetrit Group for $1.1 billion, the cash-strapped company announced today. Sony said it will use the proceeds to “undertake a range of initiatives to strengthen its financial foundation and business competitiveness and for future growth.”
The electronics manufacturer has endured four straight years of losses, due in large part to falling demand for its television sets and a weak Japanese economy. After repaying debt related to the building and other transaction costs, Sony expects to retain net cash proceeds of about $770 million, and is currently reevaluating its financial forecast, which it announced last November, for the current year ending March 31, 2013 to take the sale into account. As Businessweek notes, Sony’s sale takes advantage of rising real estate values in New York.
The transaction is expected to close in March. Sony agreed to a lease that will allow its businesses (including Sony Music Entertainment, Sony/ATV Music Publishing and Sony Pictures Entertainment) to remain in the building at 550 Madison Avenue for three years.