The Metropolitan College of New York is trying to sell real estate in lower Manhattan as part of a deal with bondholders allowing the school to skip a debt payment in November.
The private college hired Cushman & Wakefield as its broker to market and sell "either in whole or in part" its Manhattan campus, according to a
In addition to a location in the Bronx, the college owns three floors and some ground floor entry space at 40 Rector St., an office building south of the World Trade Center, according to an August report by Fitch Ratings.
Investors have been negotiating with the college after it broke certain covenants on its bonds. The college is selling its real estate in the Financial District as part of a forbearance agreement with investors, the securities filing says. It won't make a November payment on its debt.
A spokesperson for the trustee, US Bank, declined to comment.
"The Manhattan campus is underutilized, and MCNY plans to sell part of that space," a spokesperson for the school said in an emailed statement. "The college will also consider offers for its entire Manhattan campus. MCNY intends to consolidate operations on the remaining floors of its Manhattan campus, the Bronx campus, and elsewhere as needed based on the details of the sale."
The purchase of the commercial condominium in Manhattan was financed with municipal bonds issued through the Build NYC Resource Corporation, the college said in
A listing at the address posted to
Squeezed by declines in enrollment, US colleges - particularly small, tuition-dependent institutions — are struggling to fill classrooms and cover costs. Such schools are increasingly offloading some of their prized assets, like campus buildings to raise cash.
Real estate is often one of the most valuable assets colleges have and is a key feature that investors review when deciding whether to purchase a deal. Prized real estate can provide a cushion for holders if a school were to run into financial challenges, whereas less lucrative properties may provide little payoff.
About 630 students were enrolled at Metropolitan College of New York in the fall of 2022. That's nearly half of the school's overall headcount about a decade ago, according to data from the National Center for Education Statistics.
The college has $61 million of muni bonds outstanding, according to data compiled by Bloomberg. Its credit rating has been slashed deep into junk by Fitch, which in August said "default of some kind appears probable."
There have been the most higher ed defaults this year since at least 2009, according to Municipal Market Analytics, an independent research firm.
