Going once, going twice, sold — and leased back.
At least that’s the plan, we’ve learned, for Sotheby’s current Upper East Side world headquarters. We hear investment sales gurus Douglas Harmon and Adam Spies of Eastdil Secured are marketing the building to possible buyers that would likely include hospitals that are clamoring for space, residential converters and developers, as well as office and hotel operators.
The striking glass and granite building at 1334 York Ave. takes up the entire eastern blockfront between East 71st and 72nd streets. In 2000, the 1921 structure was redesigned and modernized by architects Kohn Pederson Fox, with six large floors added at a cost of around $150 million.
With roughly 500,000 square feet on 10 giant floorplates, and some ceiling heights ranging up to 24 feet, the possibilities for the property are endless. A new buyer would likely incorporate retail stores into the scheme, even if it is knocked down for a taller and more slender condo tower.
The auction house initially rented the facility under a long-term lease that began in 1979. In 2009, Sotheby’s bought the building for $370 million. It was redesigned for its use and in 2003, the renovated building was sold. Sotheby’s signed a new lease with RFR, whose co-founder Aby Rosen is a big art collector.
Similar to Harmon and Spies’ billion dollar sale/leaseback of Sony’s 550 Madison and the nearly completed sale/leaseback of Time Warner’s offices, Sotheby’s plans to sell and lease back the facility until it finds, or perhaps develops, a new home. “They want to do a short-term leaseback between three and five years,” said one source.
Sotheby’s has hired Peter Riguardi, local head of Jones Lang LaSalle, and colleague Alexander Chudnoff to find it another location. That could include a more contemporary central Midtown or even Hudson Yards-area spot like the Manhattan West site that JLL is representing.
“Given the location of our building, the current real estate market, the unsolicited interest we’ve received in our property and our responsibility to our shareholders, we are exploring our options,” Sotheby’s spokesman Andrew Gully said.