Metropolitan College Puts Lower Manhattan Campus on Market

The Metropolitan College of New York has opted to sell off part of its Manhattan campus in a bid to stave off default.

The sale, part of a deal with bondholders, would allow the school to skip a debt payment due in November. Cushman & Wakefield has been enlisted as brokers to market and sell either a segment or the whole of the school’s Financial District property, Bloomberg reported.

The college owns three floors and a portion of the ground floor at 40 Rector Street and an office building near the World Trade Center, in addition to its Bronx campus, according to an August report by Fitch Ratings.

The private college has listed part of the property as a portion of a forbearance agreement with investors, after it broke certain terms of its bonds. It will not make a scheduled November payment on the debt.

Metropolitan College has $61 million in outstanding municipal bonds, according to data compiled by Bloomberg. Its credit has been severely downgraded by Fitch, which reported that “default of some kind appears likely.”

This is not the first time the school has turned to the real estate market to pay off creditors in the wake of the pandemic. In 2023, it sought to sell two floors of an office building at 60 West Street to reduce its debt.

A representative for U.S. Bank, the school’s trustee, declined Bloomberg’s request for comment.

Metropolitan College had approximately 630 matriculating students in the fall of 2022, only half of its enrollment in 2012, according to the National Center for Educational Statistics.

It has plenty of company. More higher-ed defaults have occurred in 2024 than in any year since at least 2009, according to Municipal Market Analysis, an independent research firm.

Many smaller U.S. schools dependent on tuition have been plagued by low enrollment, leading to anemic class sizes and trouble covering expenses, forcing the institutions to sell off prized real estate to raise funds. Undergraduate enrollment overall is down 8.5 percent since 2010.

Real estate is an important metric for potential investors in higher-ed bonds to take into account. High-value holdings can provide breathing room for cash-strapped institutions.

According to Cushman & Wakefield’s website, Metropolitan College’s Rector Street campus features 16 classrooms, 59 offices, a large library, two computer labs, a student lounge and four conference rooms. It bought the space in 2014.

A representative for the school told Bloomberg that it plans to consolidate operations on its Manhattan and Bronx campuses and elsewhere based on the details of an eventual sale.

— Caroline Handel