In the grip of the COVID-19 pandemic, what risk factors need to be considered when bidding for an iconic piece of New York real estate that was already in distress before the virus hit?
PAUL MILSTEIN CENTER FOR REAL ESTATE
In June 2020, COVID-19 had shut down large swaths of the US economy, and forced nearly all office workers to work from home—with New York commercial real estate hit hard. This case discusses a real –world opportunity that arose when an iconic Times Square property that had served as the headquarters for the New York Times newspaper from 1913 until 2004—and owned by Kushner Companies since 2015—went into foreclosure. Convinced that the economic mayhem brought on by the pandemic would bring opportunities to snap up distressed real estate at the right price, the owner of a real estate private equity firm (created for the purposes of this case), considered bidding on the property when it went up for auction. The case includes three associates’ reports that analyze what the terms of an offer might be. Students reading these reports are asked to consider past loan terms and renegotiations, the value of the property in June 2020, and possible fallout should a new owner assume the current debt obligations.
Case ID: 210303
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