In a stunning report the IHT is reporting that the New York Times is mortgaging its Manhattan based headquarters in cash crunch.
The New York Times will now borrow USD 225 Million to "to ease a potential cash flow squeeze as the company grapples with tighter credit and shrinking profits."
In a news article published by IHT Richard Pérez-Peña writes "
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 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 designed by the architect Renzo Piano, and 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.
The company has two revolving lines of credit, each with a ceiling of $400 million, roughly the amount outstanding on the two combined. One of those lines is set to expire in May, and finding a replacement would be difficult given the economic climate and the company's worsening finances. Analysts have said for months that selling or borrowing against assets would be the company's best option for averting a cash flow problem next year.
Note that The Standard and Poors had recently lowered the credit rating of the Times Co. below investment grade.
"Employees of The New York Times Company (The Times) began occupying their new headquarters on the west side of Manhattan in mid-2007. Three years before this milestone, The Times’s facility team had approached building scientists at Berkeley Lab’s Environmental Energy Technologies Division (EETD), looking for help. They were searching for reliable and affordable technologies, not yet available in the marketplace, to regulate daylight in the new building," reports Berkeley Lab.
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