CBS closes on purchase of building for Letterman.

Eastern Consolidated Properties, Inc. has announced the sale of 1697 Broadway (53rd Street), the 140,000-squarefoot Ed Sullivan Theater and Office Building, to CBS, Inc. to serve as the new home for the David Letterman show which will move to CBS this summer.

Brian Ezratty, senior vice president of Eastern, represented both buyer and seller in the transaction. Eastern had been engaged by the owner, First Winthrop Associates, several weeks earlier to dispose of the property, which is also a 330,000-square-foot future development site. The contract of sale was signed three weeks ago after round-the-clock negotiations were held.

Eastern took the property to market in early December and immediately created an excitement that resulted in several cash offers in the $3.5 - $4 million range. A foreign investor became the top bidder at slightly over $4 million. At that point, in early January, CBS signed Letterman and Laurence Tisch asked John Malino, vice president of Loews Corp.', to get involved with the negotiations for the theater. Malino convinced Ezratty to set up a meeting with Phil Brannigan, Jr., vice president of First Winthrop Associates, to discuss the deal even though negotiations were in an advanced state with the other party. At that meeting Malino argued that although the proposals were similar, CBS would close within a matter of days and had a reason to do so. The meeting ended without an agreement, but within the next few days the other buyer wavered just long enough for CBS to move into position to sign a contract. However, there was still a wrench in the transaction that had to be dealt with: the theater was occupied by a tenant with a lease until the year 2000.

CBS needed the space right away. The interior of the theater needed major work done to be ready for Letterman's show in August as scheduled. The only solution was to immediately make a deal to vacate the tenant. Winthrop allowed CBS to begin negotiations with the tenant, and Ezratty, Malino and Ed Grebow, senior vice president of CBS, met with the operator and struck a deal to terminate the lease and deliver possession. He was given four weeks to close his show, "Dreamtime", and find a new location. Ezratry, along with Ronda Rogovin, vice president of Eastern, went to the market and within two weeks signed a deal to relocate the tenant. The Broadway deal then closed within days thereafter.

First Winthrop Associates was represented by Bruce Saber and Elyse Holtzman of Fried, Frank, Harris, Shriver and Jacobson and CBS, Inc. was represented by John McCarthy and Lauren McGill of Milbank, Tweed, Hadley and McCloy. Studio 50 was represented by Andrew Schoen of Rosenman & Colin.