Tobacco giant to sell 120 Park Ave. tower.

Altria will be putting its headquarters building at 120 Park Avenue up for sale in October as part of its planned departure from the city.

The firm, one of the world's largest tobacco companies, will be relocating its offices to Richmond, Virginia, where in recent years it had moved its domestic subsidiary, Philip Morris USA.

Rew-online.com first reported on Friday that the process to sell the building had begun. Known as Philip Morris Companies Inc. before it changed its name in 2003, Altria developed 120 Park Avenue, a 554,000 s/f, 26-story office building, in the early 1980s and had housed hundreds of employees there, most of which the company has said it will shed during the move.

"In New York we currently have about 600 people working here, and I would envisage that about two-thirds would regretfully not be offered jobs," said Louis Camilleri, Altria's chairman and CEO during a conference call with analysts and investors in late August.

According to a company spokesman, David Sutton, Philip Morris USA had moved 264 jobs from New York in its relocation to Richmond in 2004.

Altria had relocated the international arm of its cigarette business, Philip Morris International, to Lausanne, Switzerland in 2001 and there had long been speculation when the company, given the departure of its Philip Morris units, would give up its Manhattan headquarters.

A spokeswoman for the company wouldn't comment on whether portions of 120 Park Avenue had been vacant from the departures in recent years, but said that the building had been "fully operational."

Altria would not say whether it had imminent plans to sell 120 Park Avenue, but a source at the real estate services firm CB Richard Ellis confirmed that CBRE's Manhattan investment sales brokerage team, led by William Shanahan and Darcy Stacom, has been hired to handle the sale and would begin marketing the property in October.

Altria's move comes as the company has announced plans to restructure its tobacco business by spinning off Philip Morris International from its domestic unit, which according to Camilleri, will allow Altria to better focus on expanding its share of the global market. Altria had been rumored for years to be planning the split and likely had begun withdrawing its facilities from Manhattan as part of that plan.

Camilleri drew a direct connection between the sale of 120 Park Avenue and the plans to spin-off PMI from Philip Morris USA by confirming that part of the motivation behind the reorganization will be to allow Altria to realize the type of cost savings that it will net from shedding its Manhattan operation.

"Well, we will certainly continue to pursue cost reduction opportunities," Camilleri said during the August conference call.

"I think the ability to have more focus will enhance that ability. We are essentially eliminating a whole layer of management, which is the layer in New York."

Camilleri estimated that Altria would reduce its corporate overhead by $250 million by closing its New York headquarters.