Case Study

The Lois and Samuel Silberman Fund

Education

Savills Wins Deal of the Year After Facilitating Multi-Party Transaction for Silberman School of Social Work at Hunter College

CHALLENGE

In 1966, The Lois and Samuel Silberman Fund built a new school on East 79th Street and net leased it to CUNY’s Hunter School of Social Work at essentially no rent. By 2004, Hunter had outgrown its home and the facility was reaching the end of its viability. The Silberman Fund wanted to help build a new state-of-the-art facility for Hunter. The parties developed a plan to sell the building on East 79th Street and use the proceeds towards developing a modern school. The remaining balance would to go to Silberman’s other philanthropic endeavors.

SITUATION

Hunter wanted to move to East Harlem, a location easily accessible via subway to its main 68th Street campus. Hunter had been negotiating on a speculative development where the negotiations had faltered. They needed to find a suitable alternate relocation option. A complex dilemma presented itself -- the purchase/development of a new facility could not take place without the sale of the old one, and the sale of the old one would not be necessary if a new site could not be secured and developed at a known price. In addition, the donation which would be made by Silberman towards the development cost of the new building could not be defined until the 79th Street property was sold.

RESULTS

Over a four-year period, Savills successfully guided four parties through three transactions in what the New York Times called a "multi-party transaction of byzantine complexity". Savills was able to identify an encumbered development site on 118th Street and brought in a developer, The Brodsky Organization, to both purchase 79th Street and build-to-suit the 118th Street site. The three parties came to a development agreement to help structure the new facility. This was all done against the backdrop of a rapidly declining real estate market, post-Lehman debacle. As a result, the terms of the sale had to be renegotiated to keep the whole puzzle together. In the end, Savills facilitated the largest gift ever to CUNY from the sale of the 79th Street building and made possible the development of a new 140,000 SF school for Hunter.

This series of transactions earned Savills the Real Estate Board of New York's highest honor, the Henry Hart Rice Award given for the Most Ingenious Deal of the Year.