The Olayan Group, a Saudi conglomerate with investments in commercial and industrial companies worldwide, has partnered with a UK real estate developer to buy a 36-story Manhattan office building, the groups said Monday.
Terms of the transaction were not disclosed, but local media reports put the price tag for the Sony Plaza, at 550 Madison Avenue, between $1.3 billion and $1.4 billion. The sellers, local developer Clipper Equity and private investor Chetrit Group, bought the building for $1.1 billion in March 2013 and planned to convert the top floors of the 855,000 square foot building into residential condominiums, according to real estate data provider Real Capital Analytics (RCA). The building’s sole tenant is electronics company Sony, which is planning to move out of the Midtown tower where it has operated for almost 22 years, according to local media reports.
The new owners, Olayan and London-based asset manager and developer Chelsfield, are planning to lease the building to commercial tenants, according to the joint venture’s statement. Chelsfield, which took a minority stake, reportedly will manage the property. The firms did not disclose the equity split, and a spokesman for Olayan declined to comment on the deal.
Olayan last teamed up with Chelsfield in January 2014 to purchase a nine-building retail and office portfolio in Paris for $1.7 billion, according to RCA.
“We are delighted to partner once again with Olayan on a trophy property in a world-class city,” said Elliott Bernerd, Chelsfield’s founder, in a statement. “We are especially pleased that after our 15-year absence, Olayan America facilitated our return to the US market as asset manager of this iconic property.”
Olayan America, the group’s New York-based investment arm, made its last US purchase in December 2014, buying a Maryland apartment portfolio with Pennsylvania developer Morgan Properties for $77.3 million, according to RCA. Olayan began buying US real estate in 2007 with the purchase of a Virginia development site, according to RCA. The company has also invested in New York-based private equity real estate firm Related Companies, according to Related’s website.