NEW YORK
JAPAN’S Sony Corp on Friday completed the sale of its US headquarters for $1.1 billion to a group led by real estate developer the Chetrit Group, three sources familiar with the deal said.
SL Green Realty Corp initially provided the full $925 million in loan financing for the deal for up to three years, depending on how long Sony remains a tenant in the building, one source said.
However, Bank of China Ltd stepped up and agreed to take $600 million of the total debt financing in the form of a senior loan, the sources said.
Of the remaining $325 million in debt financing, a $175 million junior tranche was sold by SL Green to a Performing Debt Fund managed by Apollo Global Management LLC, one of the sources said. That amount can be increased to $250 million, the three sources added.
SL Green took the two most junior tranches and might eventually sell one to the performing debt fund or someone else, a source said.
Sony is shedding non-core assets as it seeks to regain ground against rivals such as Samsung Electronics Co Ltd and bounce back from four consecutive years of net losses. The Sony building, located in Manhattan’s pricey “Plaza District,” is about 820,000 square feet, making the cost roughly $1,341 per square foot. Some of that footage includes retail space that commands higher rents.
The price was the highest paid for a single US office building since Google Inc bought 111 Eighth Ave in Manhattan’s Chelsea neighbourhood for $1.8 billion, or roughly $620 per square foot, at the end of 2010.
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