Steinway & Sons said Wednesday it is in “advanced negotiations” with a buyer for Steinway Hall, its longtime home on West 57th Street. The company has been actively trying to sell the elegant piano showroom for several years now, and in November disclosed a letter of intent to complete the sale for $195 million.
The company told investors in a conference call that the process has taken longer than anticipated, due in part to the complexities of the company’s lease. The transaction would be a three-way deal in which Steinway, which owns the building, will receive $56 million and the owner of the land will get $140 million.
"It has to do with the complexities of the ground lease,” said Steinway CEO Michael Sweeney. “I’d have thought we were close to making a deal.”
“All of us at Steinway agree there’s no particular reason we should own a 17-story office building at 57th and Sixth. The idea that we would sell the building is something we’ve all agreed to if there is fair value.” He added: “We’re very near the end of that process where the market will speak to us one way or another.”
Addressing questions about Steinway’s future in Manhattan, Sweeney said the company will continue to have a “significant physical presence in New York City" if it moves out of Steinway Hall and sales and rental services wouldn't be interrupted.
Sweeney left open the possibility that the piano maker could stay at Steinway Hall if a suitable buyer isn’t found. If the company doesn't move, however, it wouldn’t be able to reap the kind of income from leasing out the space to office tenants than if the building were sold. That is partly because the building requires significant upgrades. But, Sweeney added, “real estate developers believe it has highest potential as a high-end residential or hotel" building.
Steinway Hall was built by the Steinway & Sons piano company in 1925 as a showroom for its instruments. With its marble columns, wood paneling and ornate ceilings, the space contains three floors of concert grands, baby grands and uprights. The building is presently home to the company’s sales, marketing and service departments and it hosts concerts in its two-story rotunda.
In the past, the building's upper floors were rented out to office tenants including The Economist magazine but they are currently vacant. Steinway Hall was registered as a historic and cultural landmark in 2001, meaning the city's Landmarks Preservation Commission must approve any new uses or changes.