The Sony Building is about to get a $300 million makeover, and owner Olayan America is hoping the changes will help command higher rents.
Olayan plans to renovate 550 Madison, a 41-story office tower built in the 1980s and designed by architects Philip Johnson and John Burgee. After the overhaul, Olayan plans to charge tenants $115 to $210 a square foot, the Wall Street Journal reported.
“We’re not going to scrimp and save,” Tony Fusco, managing director and head of Olayan America’s real estate division, told the Journal. “We’re building this to be leased and held for generations.”
Commercial brokers told the Journal that such a high rent range will be a tough ask, especially given the fierce competition outside the Plaza District (like Hudson Yards and Lower Manhattan). Commercial brokers said the amenities will be key. Today’s office tenants want gyms, cafeterias, dining options, conference rooms and lounges.
Snøhetta is designing the renovation, which will include a 21,000 square-foot, public garden in the back of the tower. Part of the building’s granite facade in the front and back will be replaced by glass.
As The Real Deal first reported, Olayan purchased the building from the Chetrit Group in 2016 for $1.4 billion after Chetrit abandoned plans to convert the property’s upper floors into residential condos. The company, which is based in Saudi Arabia, has become a major player in real estate in the U.S., with a stake in the Related Companies and a seat on the board of Blackstone Group’s real estate funds. [WSJ] — Kathryn Brenzel