Advisory

Tenantwise advised Sotheby’s in the acquisition of its 1334 York Avenue headquarters which was completed on February 6th, 2009 for $370 MM. According to Sotheby’s press release of February 9th, the purchase was funded by an assumed mortgage of $235MM and two cash payments totaling $135MM. The purchase reduced annual cash expense by $4MM per year by substituting a mortgage at a 5.6% interest rate for a lease obligation with a 10.4% rate. While the property was offered to Sotheby’s at $500MM, Tenantwise discovered that a ROFO had been previously triggered through a hidden, cross-border financing that took place in Germany. Sotheby’s successfully exercised its ROFO at the lower price and was able to acquire the property at a substantial discount to market. The acquisition also benefited from an assumption and restructuring of mortgage debt, a repurchase of senior notes at a discount, and an improved credit facility all coordinated with Sotheby’s Finance Team.