Steinway to Sell West 57th St. Showroom to Condo Developer
Wednesday, March 27, 2013 - 08:00 AM
Steinway Musical Instruments Inc. is selling its stake in the Steinway Hall building in New York to JDS Development Group for about $46 million.
The musical instrument maker said Tuesday that 247,000-square-foot, 16-story office building is home to its flagship retail showroom. Steinway Hall opened in 1925 and is located on West 57th St. in Manhattan.
The deal gives Steinway, which is best known for its pianos, the right to occupy the building rent free for 14 months after closing and to extend the occupancy an additional four months subject to an agreed upon rent.
Steinway expects cash proceeds of about $43 million from the sale at closing after paying transfer taxes. It expects to recognize a taxable gain of $22 million once the deal closes. The transaction is expected to close in the second quarter.
Chairman and CEO Michael Sweeney said in a statement that part of the company's decision to sell its stake in the building came from the significant investment needed to maintain the building's infrastructure and appearance.
Sweeney said that over the next year or so the company will be working on creating plans for a new Steinway Hall in Manhattan.
Steinway's stock added 44 cents, or 1.9 percent, to $23.50 in morning trading Tuesday. Its shares have traded in a 52-week range of $20.61 to $26.70.