Scholastic Corporation has finalized sale‑leaseback agreements for its New York City headquarters at 555‑557 Broadway and its primary distribution facility in Jefferson City, Missouri. The company sold the NYC property to a subsidiary of Empire State Realty Trust for $386 million in cash and the Missouri site to affiliates of Fortress Investment Group for $95 million, generating a combined gross value of $481 million and estimated net proceeds of $401 million.
The New York transaction will leave Scholastic with a 15‑year lease that includes two 10‑year extension options. After taxes and fees, the net proceeds from the NYC sale are expected to be $327 million, and the company will incur an incremental annual expense of $11.2 million. The Jefferson City sale will be backed by a 20‑year triple‑net lease with two 10‑year extensions, and the annual rent is projected to be $7.6 million, with net proceeds of $74 million.
The sale‑leaseback strategy is part of Scholastic’s broader balance‑sheet optimization plan. By monetizing non‑operating real‑estate assets, the company frees up capital that can be deployed to reduce debt, fund share repurchases, and support growth initiatives. The transaction also allows Scholastic to shrink its footprint at the Broadway location, improving operational efficiency while maintaining continuity of operations.
In fiscal 2024 Scholastic reported an adjusted EBITDA of $136.9 million, which rose to $145.4 million in fiscal 2025. The company’s debt load has been steadily declining, and it returned more than $90 million to shareholders through dividends and share repurchases in 2025. The $401 million net proceeds will be used to further reduce leverage and accelerate the share‑repurchase program, strengthening the company’s financial position and providing a buffer against potential headwinds in the education market.
Peter Warwick, Scholastic’s President and CEO, said the transaction “unlocks the value of our owned real estate and focuses on accelerating long‑term, profitable growth and shareholder value creation.” The sale‑leaseback reflects management’s confidence in the company’s core business and its ability to generate sustainable cash flow while improving capital efficiency.
The transaction enhances Scholastic’s liquidity and reduces long‑term debt, positioning the company to invest in future growth opportunities. While the lease commitments increase operating expenses, the long‑term lease terms and the scale of the proceeds provide a net benefit to the company’s financial health and shareholder value.
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