Wednesday, August 29, 2007
The Value of Newspaper (Buildings)
From the Wall Street Journal, no subscription required:
Don't Stop the Presses -- Sell the Building Instead
By THADDEUS HERRICK
August 29, 2007; Page B1
When Philadelphia Media Holdings LLC acquired the Philadelphia Inquirer last year, borrowing $375 million for the purchase, the company began looking at ways to pay off its debt. One option: Sell the landmark 18-story building on North Broad Street that has been home to the newspaper since 1924.
Last week the group of local investors acted, putting the 470,000-square-foot Beaux-Arts tower on the market. A person close to the company believes Philadelphia Media Holdings can fetch as much as $70 million for the building.
With profits and revenue falling, newspaper companies are increasingly looking to real estate to shore up their finances. Though newspapers are still largely profitable, they are seen by many on Wall Street as a dying medium. In some cases, the Inquirer and the Boston Herald among them, financial pressures are forcing newspapers to sell their property as a quick way to come up with cash. In others, especially papers acquired by private-equity firms, the new owners are simply trying to squeeze as much money out of the operation as possible, says newspaper analyst John Morton, president of Morton Research Inc.
Hat tip to Stanley