Sotheby’s is scouring Manhattan for a new location — but any move is contingent on the sale of its entire purpose-built auction headquarters on the Upper East Side.
Second-round bids for Sotheby’s current 1334 York Ave. property will be taken by investment brokers Douglas Harmon and Adam Spies of Eastdil Secured in mid-to-late January.
The duo declined comment as last week Real Estate Alert reported bidders may now make offers for either the entire 490,000 square feet or just the lower 227,000 square feet, which Sotheby’s would vacate after the sale.
If it sells a portion of the building, Sotheby’s would then restack into the top five floors and part of the ground, which it would reconfigure with a separate lobby entrance.
Peter Riguardi and Alexander Chudnoff of Jones Lang LaSalle are representing Sotheby’s in the relocation hunt and declined comment, but other sources snitched that Sotheby’s has looked in Midtown, the Hudson Yards (as The Post first reported), TriBeCa and the Meatpacking District.
Sotheby’s, of course, believes it is a destination unto itself and its clients will go anywhere.
The upcoming new Whitney Museum and the High Line Park are invigorating the Meatpacking District, which could bring a younger audience to Sotheby’s events. But there is also that long black car ride downtown from its current location between East 71st and 72nd streets.
Sources tell us that among its most desired choices are two prime Midtown spots. One is the Time Warner Center’s high-ceilinged studio space, which the entertainment company would be giving up when it likely moves to the Hudson Yards.
The other is the Sony Wonder Technology Lab space at the base of 550 Madison Ave. Since the building was sold and Sony is likely heading to 11 Madison Ave., the new 550 Madison owners, The Chetrits and David Bistricer, will have to keep open the “Covered Pedestrian Space,” “the Arcade” and the “science and/or communications exhibit” — which includes providing free community meeting space.
To use the four-story space for retail, as they have quietly planned, or for Sotheby’s, they would need a change to the building’s restrictive declaration, which would likely generate community outrage.
But according to the documents reviewed by Between the Bricks — aka what I did on my weekend — the owners may be easily able to swallow the financial penalty that comes with shutting down the Wonder Lab.
The declaration calls for a penalty on the 61,875 square feet of bonus floor area from the building’s development. If just the Exhibit area is not open, the penalty is half the “fair market rental value…of comparable first class office space (on the top floors)…” from buildings developed at the same time in the same area.
If just the Covered Pedestrian Space and Arcade are closed, the penalty would also be half the rental value.
Three appraisers would have to come up with the rent. If we take the liberty of calling the comparable rent $100 per square foot, the $50 penalty works out to $3,093,750. With retail rents on area ground floors running $1,000 a square foot and up, even if Sotheby’s or any retailers paid a blended $100 per square foot, they are still $3.1 million ahead.
Add the spaces for the Arcade and Walkway and they would need to get another $6 million-plus to come out even.
We will keep an eye on the Sony transformation as the new ownership solidifies its plans.
Meanwhile, Sotheby’s has been favorable to both that location and the Time Warner Center, both of which bring it closer to the newer centers of wealth, just as would the current and soon-to-be vacant Trump-owned Niketown building on East 57th Street, which is connected to Trump Tower but also sits opposite LVMH’s luxury “campus” lineup and between Tiffany’s and the IBM tower and atrium.
“We continue to explore options as we determine what’s best for Sotheby’s now and in the future, but no decisions have been made,” said Andrew Gully, Sotheby’s worldwide director of communications.
No one else could be reached for comment over the holidays.