Metropolitan College Moves to Sell Part of FiDi Campus

A college based in the Financial District is turning to a selloff to alleviate a large debt problem.

The Metropolitan College of New York is looking to sell two of its floors at an office building at 60 West Street, Bloomberg reported. Should the school ditch that portion of its footpring, it would leave Metropolitan College with one and a half floors.

It’s unclear how much the college is looking to pull in from the partial campus sale, proceeds from which would pay for deferred debt service payments and redeem bonds. The possibility came to light in a regulatory filing, where the college proposed pausing debt payments for about five years as it works to sell the floors.

The college sold bonds a little less than a decade ago to help build the campus, which opened in 2016. Debt has piled up, however, and roughly $62 million is outstanding. In addition to pausing debt payments, the school also wants to waive a $5 million liquidity requirement until 2028.

College officials confessed the sale of two office floors may not be enough to cover debt service payments. The possibility of selling the entire campus and leasing space elsewhere has been floated to investors, though Fitch Ratings splashed cold water on the school’s ability to sell, relocate and redeem by a November 2024 deadline.

Metropolitan College has struggled since the pandemic, feeling a sizable drop in enrollment. The student population tends to skew older. A majority of students are either working women or from economically disadvantaged communities, two populations harmed by the coronavirus.

The pandemic is also what may make a sale of two office floors a potentially ineffective way to clear the school’s financial burden. Vacancy rates have soared as tenants have turned their backs on office space, comfortable allowing employees to work remotely part- or full-time.

The Financial District was home to last quarter’s largest deal for office space, which saw the Department of Citywide Administrative Services take 840,000 square feet in a relocation to 110 William Street.

There are also those trying to keep the faith elsewhere in Manhattan’s office market. Fortress Investment Group recently bought $1 billion of loans from Capital One, a debt portfolio largely centered on New York City office properties.

— Holden Walter-Warner