David Rosenthal: belief

Transcript context

…Right around there. It's like a Warren Buffett–type deal that he does. Although I would say unlike at this time when Buffett was investing in Goldman, Harley Davidson and the like, those were solid companies. There are some real question marks around The Times at this point in time. February, the next month, they eliminate the dividend altogether. Family members must have been pissed. They're doing buybacks for the last few years and now you just eliminated the dividend to save money. In March, they announced a $225 million sale and leaseback of a portion of the headquarters building. They just built this headquarters building. They sold it to W. P. Carey, and agreed to lease it back for 15 years with an option to buy back the portion they sold in 2019 for $250 million, which they exercised, so they now own the building again. Which we should say this is actually one of the savviest investments of all time by The Times. Think about how much New York real estate—especially Class A real estate—appreciated between 2009 and 2019. The New York Times sold these floors for only $225 million, and they said a decade later in 2019, we have the right to buy it back for $250 million. That's really not much appreciation. I think I found a source that said that they essentially bought 750,000 square feet of prime New York office space at $333 a foot. Nothing in the market is trading around their building under $1500 a foot. They quintupled the value of their holdings. For people who were trying to make sense of a sale-leaseback here, what they basically said was they owned their house but then they took out a mortgage on it. They said, I'm going to keep living here, you're going to own it, I'm going to pay you every month. It's a bummer thing to have to do especially when you have so much of your identity tied up in this great building that you needed, but you needed the $225 million, you need the cash. But holy smokes, to be able to get it back a decade later for close to the same price, so savvy.…

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