No sooner had we written our latest update about the New York Times’ cash crunch than we saw that the company is finally dealing with it:
NYT: 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 per cent 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.
$225 million will help significantly. It will add another $225 million of debt to the company’s balance sheet, of course (and the cash will disappear in May when the company pays down its credit line), but a mortgage or sale of the building will buy the company time to make more radical restructuring moves.