S
cholastic Corporation (NASDAQ: SCHL) has agreed to sale‑leaseback deals for its New York City headquarters at 555‑557 Broadway and its main distribution center in Jefferson City, Missouri. The transactions are expected to bring in $401 million in net proceeds, which the company will use to pay down debt and repurchase shares.
Under the terms, Scholastic will sell 555‑557 Broadway to a subsidiary of Empire State Realty Trust (ESRT) for $386 million in cash. The sale is projected to net $327 million after taxes, fees and property obligations. ESRT will take over maintenance and capital improvements, and will also assume existing retail leases on the building’s lower floors. Scholastic will then lease the space back for 15 years, with two 10‑year extensions, and will pay an estimated $11.2 million annually in rent. The lease will partially offset the company’s reduced operating costs from vacating portions of the building.
The Jefferson City facility will be sold to funds managed by Fortress Investment Group affiliates for $95 million in cash, expected to net $74 million after transaction costs. Scholastic will lease the property back under a 20‑year triple‑net agreement, with two 10‑year extensions, and will incur straight‑line rent of about $7.6 million per year.
Both deals are slated to close before the end of 2025, subject to customary conditions such as title confirmation and surveys. The proceeds will be deployed in line with Scholastic’s capital allocation priorities, focusing on reducing leverage and returning capital to shareholders.
“We are unlocking the value of our non‑operating assets while securing long‑term use of key real‑estate assets that support our business,” said Peter Warwick, President and CEO. “These sale‑leasebacks give us a stronger balance sheet and allow us to invest further in our brand, content and mission.”
The Board of Directors, after evaluating multiple options and conducting competitive processes, concluded that the sale‑leasebacks offered the best opportunity to enhance the company’s financial position and create shareholder value with minimal operational disruption.
Key financial highlights:
* 555‑557 Broadway: $386 million sale, $327 million net; 15‑year lease, $11.2 million annual rent; ESRT assumes maintenance and existing retail leases.
* Jefferson City: $95 million sale, $74 million net; 20‑year triple‑net lease, $7.6 million annual rent.
Scholastic will provide further details during its earnings conference call on December 18, 2025.
Advisors: Newmark Group, Inc. (exclusive advisor), Hogan Lovells (legal counsel), and Gagnier Communications (strategic communications).
About Scholastic: For over a century, Scholastic has promoted literacy and learning for children worldwide. As the largest publisher and distributor of children’s books, it offers curriculum, professional services, and media across more than 135 countries.
Forward‑looking statements in this release are subject to risks and uncertainties that could cause actual results to differ materially from those expressed.
