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Chicago,
Illinois
Newcastle financial engineering created $60 million in value while preserving ownership and control for Loyola.
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The Need
As part of a comprehensive financial restructuring, Loyola University wanted to raise capital by selling a half–block of property in the heart of its downtown campus. The sale of land, then improved with two aging, underutilized academic buildings, could generate a substantial, one–time capital injection to help meet current and future programming needs. The Assignment
Loyola turned to Newcastle for advice on how to achieve maximum, long–term benefit from this surplus property. Based on the firm’s analysis of the property and Loyola’s vision, Newcastle recommended against a sale. Instead, Newcastle demonstrated how a long–term lease of the property’s development rights would enable the University to generate four times the economic value of a sale, while retaining long–term control of the site. |
The Result
Newcastle undertook an international offering of Loyola’s property and negotiated a 99–year lease for the development of a luxury continuing–care retirement center on the site. The new 53–story tower will also provide Loyola with 35,000 square feet of space on the first and second floors of the building. By helping Loyola consider an alternative to the outright sale of this property, Newcastle created more than $60 million in additional value for the University; enabled Loyola to maintain an uninterrupted, street–level presence on its downtown campus; and preserved long–term ownership of the property for the University.
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