Produced by: Office of Communications, Institutional Advancement
December 15, 2013
Taking advantage of the strong New York City real estate market, St. John’s University recently announced the sale of its Manhattan campus, located at 101 Murray Street in lower Manhattan. The University will continue to occupy the building for the current academic year, and will welcome students to a new Manhattan location in time for the start of the Fall 2014 semester.
St. John’s has occupied the Murray Street location since June 2001, following its merger with The College of Insurance (TCI). Through the merger, TCI became The School of Risk Management, a component of the University’s The Peter J. Tobin College of Business.
The 10-story building was sold for $223 million, qualifying it as one of the largest real estate transactions in the history of lower Manhattan. While a portion of the proceeds from the sale will be used to enhance the University’s academic offerings and improve facilities, the largest share will be used to augment its endowment, which will allow for a significant increase in ongoing financial aid for deserving students.
“The University takes great pride in our presence in Manhattan, and the overwhelming success of this transaction allows us to ensure the strength of that presence for generations of St. John’s students to come,” said Martha K. Hirst, St. John’s Executive Vice President, Chief Operating Officer and Treasurer.
As a result of this successful real estate initiative, Moody’s Investors Service has raised the rating of the University’s outstanding revenue bonds from “stable” to “positive”. Moody’s indicated that the overall reason for the improved rating was based on the fact that the sale could more than double St. John’s unrestricted financial resources and greatly improve operating flexibility.
“We are extremely pleased that Moody’s has raised its credit rating outlook for St. John’s,” noted Sharon Hewitt Watkins, CPA, University Vice President for Business Affairs and Chief Financial Officer. “Particularly in these challenging times in higher education, the fiscal strength of the University is critical to ensuring our students’ success.”
Moody’s considered a number of other factors before issuing the new rating.
Of major importance was St. John's established, but highly competitive market position as a large, private Catholic university that has a track record of favorable operating performance and solid fundraising.
The evaluators also reacted favorably to the University’s commitment to cost containment and sound budgeting practices as reflected in its history of consistently balanced budgets. They noted that “St. John’s financial management team has built in operational flexibility on the expense side with contingency planning and conservative budgeting.”
Moody’s concluded the evaluation by stating that a clear strategic plan and liquid investment strategy for the use of proceeds of the building sale could result in an additional upgrade for the University in the future.