ESRT News & Events

Scholastic Corporation (SCHL) announced that it has entered into sale-leaseback transactions for its headquarters location in New York City and its primary distribution facility in Jefferson City, Missouri, which together are expected to generate estimated net proceeds of $401M. "The sale of these real estate assets aligns with the Company's long-term plan to monetize its significant non-operating assets to improve the efficiency of its balance sheet and create shareholder value. Proceeds are expected to be deployed in accordance with the Company's capital allocation priorities, including debt reduction and share repurchases," the company stated. Under the terms of the transactions, Scholastic is to sell 555-557 Broadway to a subsidiary of Empire State Realty Trust (ESRT) for gross proceeds of $386M in cash and Jefferson City to funds managed by affiliates of Fortress Investment Group for gross proceeds of $95M in cash. Upon closing of each of these transactions, Scholastic will enter into long-term leases to continue operations at both locations, while substantially reducing its footprint at 555-557 Broadway. Both transactions are expected to close before the end of 2025, following satisfaction of customary closing conditions, including title confirmation and surveys for Jefferson City. "Today's announcement reflects meaningful momentum for Scholastic as we unlock the value of our owned real estate and focus on accelerating long-term, profitable growth and shareholder value creation. Following highly competitive processes, these transactions maximize value from our most significant non-operating assets, while securing long-term use of strategic real estate key to our operations, now rightsized for our business needs. With a stronger balance sheet, we will be better positioned to continue investing in the extraordinary potential of our brand, content and mission, while returning capital to shareholders," said Peter Warwick, President and CEO of Scholastic.

Empire State Realty (ESRT) announced that it has agreed to acquire 555-557 Broadway for $386M. The property is located in the SoHo submarket of Manhattan, between Spring and Prince Streets with entrances on both Mercer Street and Broadway, and is comprised of approximately 368,000 square feet of office and 28,000 square feet of prime retail. The property is 70% leased, including a 15-year office lease with Scholastic (SCHL) for 222,000 square feet and fully leased retail with a weighted average lease term of approximately eight years. There is a three-floor block of over 110,000 square feet, a unique availability in a prime market. The all-cash transaction is expected to close in December.