The company announced the $175m deal last week, revealing that it included a leaseback option for a period of up to 40 years with renewals.
Chief executive Bill Ruprecht, who called the deal an “outstanding opportunity” for Sotheby’s, estimated that the company would make a $25m profit on their original investment in the building which they took over two years ago, although this would have to be amortized over the initial term of the lease in keeping with the relevant accounting rules.
He said the deal would strengthen Sotheby’s balance sheet – the company announced a net loss of just over $48m for the first nine months of the year – by allowing them to pay off $100m in short-term debt as well as anti-trust fines.
The building is being sold to RFR Holding, who have an extensive portfolio of Manhattan real estate.
Sotheby’s refurbished the York Avenue building by adding an extra six floors and completely redesigning the existing four floors.
The day following the announcement, Sotheby’s quoted A shares climbed 25 points to 525 against a low for the period of 462.5.
Sotheby’s sell New York HQ to help clear debt
Deal clears way for leaseback of building: Sotheby's will be able to clear up to $100m of debt – including their recent $20m European Commission fine – by selling their York Avenue headquarters in New York.
