This is really no surprise. Anyone who has a pulse knows that there are plenty of corporations in trouble and IDT is one of them. In February of 2007 the companies stock was trading at almost $12, February 2008 it was just over $6, and today it is just above $0.30. They purchased the property in February of 2008 at about the midpoint of their downturn. Probably not a great business decision in hindsight but really who thought we’d end up where we are today.
At the time even it looked like a great deal at less than $65psf. Considering that the office rents in Newark are holding at $25/sf, the 520 Broad St property at roughly 500,000sf could generate approx $12.5mm in gross potential revenue. Figuring expenses at roughly 35% of revenue would make their purchase at $50MM a steal.
Now the challenge will be figuring out what to do with it.