09/29/2006 - EMI Sells Iconic Capitol Tower in Hollywood, Arranges Lease

EMI Music North America has now sold the legendary Capitol Records Tower in Hollywood, a symbolic move. Argent Ventures, a New York-based commercial property developer, purchased the Tower and adjacent properties for $50 million. Argent and EMI have structured a long-term leasing arrangement, keeping the Capitol Records label and Capitol Studios in the building for "many years to come". EMI pointed to a "strategy to divest non-core real estate assets," an approach that was recently deployed in Japan.

The move offers a nice balance sheet bump for EMI, though the storied property is now in third-party hands. But labels are suffering financially, and EMI Music North America chairman David Munns pointed to a larger restructuring. "This is part of the restructuring effort we announced in April, and will help to ensure our organization remains flexible, with a focus on investment in the key areas of A&R, marketing and the development of our digital business," he said. The purchase was revealed Thursday morning.