NY Times Considers Possible Sale Leaseback Of Its Free & Clear Interest In 52-Story Headquarters; Seeks "Rescue" From Potential Cash Flow Squeeze

In New York City, The New York Times reports:

• The New York Times Company plans to borrow up to $225 million against its mid-Manhattan headquarters building, to ease a potential cash flow squeeze as the company grapples with tighter credit and shrinking profits.

• The company has retained Cushman & Wakefield, the real estate firm, to act as its agent to secure financing, either in the form of a mortgage or a sale-leaseback arrangement, said James M. Follo, the Times Company’s chief financial officer.

• The Times Company owns 58 percent of the 52-story, 1.5 million-square-foot tower on Eighth Avenue, which was [...] completed last year. The developer Forest City Ratner owns the rest of the building. The Times Company’s portion of the building is not currently mortgaged, and some investors have complained that the company has too much of its capital tied up in that real estate.(1)

For more, see Times Co. to Borrow Against Building.

(1) Unlike the average homeowner in foreclosure, The Times is affirmatively and publicly expressing its interest in a possible sale leaseback with potential funding sources, and has retained the services of professionals to seek out such a transaction. The Times, with its access to sophisticated legal and financial advisers, has the kind of bargaining power that makes it an unlikely target for an equity-stripping scam. See generally, DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams.

Accordingly, such a transaction, should it take place, probably runs a minimal risk of being recharacterized as an equitable mortgage. See generally, When is a Sale-Leaseback an Equitable Mortgage?