Real Estate Acquisition—Dependent on Sale of Existing Property
About the Client
Our client’s school was founded almost a century ago based on the belief that a vibrant community could be nurtured through the arts. Although the school is a center for education and performance for all New Yorkers, a specific neighborhood is home, making its location synonymous with its brand.
- Office Condo Financing
- 19,200 sf
- $14.1M (acquisition)
- $7.5M (renovation)
Juggling Real Estate Priorities
The school’s expanding programs and enrollment necessitated acquiring a larger facility but with two caveats: remain in the neighborhood and sell the existing property first. The acquisition of two adjacent commercial condo units (to be combined into one modern school) proved to be a more arduous process than originally anticipated by our client.
Financing to Cover the Shortfall
The school purchased two nearby condos, totaling 19,200 square feet for $14.1M. The nonprofit succeeded in selling the existing school building creating proceeds for the new acquisition, but financing was needed to cover the shortfall and planned improvements. Cost estimates for the transition and for renovations to meet the school’s ambitious programing varied widely; the initial figure of $5M grew to $6M and finally to $7.5M.
The persistence, patience, and proactive approach demonstrated by our legal and real estate broker/consultant partners made the difference for our client.
Leveraging Real Estate Expertise
We relied on our real estate broker/consultant partner and on our credibility with lenders to manage the sale of the existing school and the purchase of the condos—in conjunction with financing. The optimal structuring of the transaction ensured the placement of a $7.5M loan on favorable terms with a commercial bank.