On Friday, Sotheby's revealed its re-conceived and expanded 90,000 square feet of exhibition spaces

This commentary by Marion Maneker is available to AMMpro subscribers. (The first month of AMMpro is free and subscribers are welcome to sign up for the first month and cancel before they are billed.)

Judging from the reaction to Friday’s announcement that Sotheby’s is nearing completion of a $55m, two-year renovation, the significance of this event is getting lost. The construction project will reshape the first four floors of Sotheby’s headquarters building on York Avenue in Manhattan to make 90,000 square feet exhibition space (increasing it by nearly 50%) that includes three two-story galleries among the 40 new spaces as well as a single wall presenting 1200 un-interrupted square feet of wall space and another that is 106 feet long. But that’s not the dramatic part.

The decision to re-make Alfred Taubman’s carefully planned glass tower reveals yet another step in Sotheby’s search for a corporate strategy that will open a path toward a transformation of Sotheby’s business. Real estate is a tell for Sotheby’s now as much as it was when Taubman built the vaulted, escalator-connected headquarters two decades ago amidst a rush to open the business onto the internet.

Four years into its new ownership and leadership, the building may be emerging as an unexpected strategic asset again. When Mick McGuire first launched his activist campaign to transform Sotheby’s in late 2013, real estate played a starring role in the financial engineering McGuire believed would unlock value from Sotheby’s balance sheet. Selling the building (which Sotheby’s had used as as source of quick cash in the past) and moving to a more culturally relevant mid-town location near Sotheby’s rivals would free up hundreds of millions of dollars. At the time, Hudson Yards impresario Stephen Ross was casting Sotheby’s as a featured attraction on the podium. In 2013, Ross reportedly tried to bring Sotheby’s to his new city-within-the-city by bidding for the York Avenue building in a 1031 exchange for new space in Hudson Yards.