$6.3B Manhattanville Plan Gets Mixed Feelings : NEW YORK CITY-The Columbia University expansion plan, which is expected to add up to 6.8 million sf of new facilities, continues to gain resistance regarding eminent domain.
The specific financial
benefit supplied by the MESA depends upon the type
of building owner.
•
For a REIT, the financial benefit
of the MESA is increased Funds Available for
Distribution (FAD) which translates into increased
dividend and share price. This benefit occurs because
capital improvement projects that would have required
funding as Recurring Capital Expenditures (Recurring
CapEx) are accomplished at no cost to the REIT, causing
funds earmarked for Recurring CapEx to become Funds
Available for Distribution (FAD).
•
For an institutional investor,
a private real estate company or a high net worth individual
real estate investor, the financial benefit of the
MESA is increased investment yield through
a lower investment basis (and possibly a higher property
income).
•
For all types of real
estate investors (i.e. REITs, Institutional, etc.)
MESA produces increased proceeds at sale via
the capitalized value of increased NOI at MESA termination.
