Scholastic Corporation (NASDAQ:SCHL) rallied 5.2% in Tuesday’s premarket session after revealing that it has reached binding agreements to sell both its New York City headquarters and its Missouri distribution center through sale-leaseback arrangements expected to generate $401 million in net proceeds.
The children’s publishing giant announced that it will sell its historic 555–557 Broadway headquarters to Empire State Realty Trust (NYSE:ESRT) for $386 million, while its Jefferson City distribution center will be sold to Fortress Investment Group–managed funds for $95 million. Scholastic will remain a tenant at both sites under long-term lease agreements, though its footprint at the Manhattan property will be significantly reduced.
Both transactions are slated to close before year-end 2025, pending standard closing conditions. Scholastic said it intends to use the cash inflows to advance its capital priorities, such as reducing debt and continuing share buybacks.
CEO Peter Warwick said the agreements reflect a major step forward for the company, explaining: “Today’s announcement reflects meaningful momentum for Scholastic as we unlock the value of our owned real estate and focus on accelerating long-term, profitable growth and shareholder value creation.”
The New York real estate deal is projected to deliver roughly $327 million in net proceeds after taxes and related costs. Scholastic has committed to a 15-year lease with two optional 10-year extensions, with the arrangement carrying an anticipated annual expense of $11.2 million—partially offset by lower operating costs due to the smaller footprint.
The Jefferson City sale is expected to provide about $74 million in net proceeds. Scholastic will enter a 20-year triple-net lease with two additional 10-year extension options, at an annual rent of $7.6 million.
Scholastic noted that its board conducted competitive bidding processes for both assets and concluded that these agreements would best enhance the company’s balance sheet with minimal operational disruption. Additional information will be discussed during the company’s earnings call on December 18, 2025.