AIG to Sell Its Iconic Wall St. Headquarters
Thursday, June 4, 2009
New York City was teetering on the brink of bankruptcy in the mid-1970s, and companies were abandoning the crime-ridden metropolis for offices in New Jersey and Connecticut and Long Island. But a growing insurance company named American International Group cast its lot with the city's future and bought a skyscraper at 70 Pine St.
Over the next three decades, AIG would grow into a global giant, operating in more than 130 countries, only to crash spectacularly during last fall's financial crisis. Now, as it struggles to pay back billons in aid from U.S. taxpayers, the company has agreed to sell its iconic New York headquarters, according to people familiar with the deal.
The art deco building on Pine Street is one of the city's tallest, rising 66 stories and towering nearly 1,000 feet above lower Manhattan's financial district. AIG plans to complete the sale of the building and another nearby at 72 Wall St. by summer's end, sources said.
The company confirmed the sale yesterday but declined to provide details about the buyer or the selling price. But a person familiar with the deal said the buyer was a foreign company. Experts have estimated the sale of the headquarters at about $100 million, far below what it likely would have commanded before layoffs consumed Wall Street and the real estate market collapsed.
"It's kind of the classic New York skyscraper," said Daniel Abramson, professor of art history at Tufts University and author of "Skyscraper Rivals: The AIG Building and the Architecture of Wall Street." He added: "If there are images of the city that stand for it, the AIG building is one of those."
The steel-framed skyscraper, clad in masonry, was finished toward the end of a jazz-age building boom that ended during the Great Depression. It was completed in 1932 to house Cities Service Co., later known as Citgo.
It featured state-of-art design for its time -- double-decker elevators, hot-water heating and a sleek lobby of marble and polished steel. A soaring spire tops the structure and glows high above the city at night. A small observatory enclosed entirely in glass offers breathtaking panoramas of Manhattan.
In 1976, it caught the attention of Maurice "Hank" Greenberg, AIG's chief executive at the time.
"We were desperate for more space," he recalled. "We were growing and growing. We grew into the building quickly. I believed New York City would be the nexus of where to be. It was a tremendous buy. We bought it for $15 million."
Mayor Abe Beame held a news conference to thank AIG for its willingness to resist the exodus and remain in the city.
"It's a great symbol. It's too bad," Greenberg said of the pending sale. "I don't see the logic in selling your head office building, which is an image around the world, in the midst of a real estate depression. It doesn't make any sense."
But AIG spokeswoman Christina Pretto said the sale is right for the company. "It makes sense from an expense standpoint and from a space standpoint," she said.
A person familiar with the deal said AIG will have the right to occupy the headquarters through 2010. It will vacate the Wall Street building, which is connected by a skywalk, by year's end.
In addition, the insurer is in the early stages of drafting a relocation plan but expects to remain anchored in lower Manhattan, even as the company shrinks.
"Nothing lasts forever on Wall Street," said Abramson, the Tufts professor. "Every one of the buildings has changed hands. AIG lasted longer than most."