The purchase price for the York Avenue offices and auction rooms was funded by the assumption of the prior owner’s $235m mortgage at a rate of 5.6%, a $50m cash payment made in January 2008, and an $85m cash payment made on February 6, 2009.
Chief executive Bill Ruprecht pointed out that one of the key financial benefits of the deal was that it allowed the firm to replace their capital lease obligation on the property at a 10.4 per cent rate with a mortgage at a rate of 5.6 per cent.
“This will result in annual cash interest expense savings on the building of approximately $4m in 2009,” he explained.
Sotheby’s also announced that they had reduced their total borrowing capacity from $300m to $250m, “all of which is currently undrawn”.
“Management concluded the reduction in the total borrowing capacity is appropriate in light of the company’s current cash balances and projected liquidity needs,” said chief financial officer Bill Sheridan.
• Sotheby’s have opened an office in Istanbul – the first international auction house to have an incorporated office in Turkey.
They say collectors and buyers based in Turkey have become increasingly active in Sotheby’s international auctions across a broad spectrum of categories. A national art market has developed apace – one that will receive wider attention when Sotheby’s hold their inaugural sale of Turkish Contemporary Art in London on March 4.
