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Audacy Selling Phoenix Studio Property For $10.5 Million Prior To Bankruptcy Filing

TheBigA said:
No word if Audacy will stay in the building as a renter

www.insideradio.com

Audacy Sells Phoenix Real Estate For $10.5 Million.

Audacy told investors in August that it had lined up a deal to sell some of the land and buildings tied to its Phoenix cluster of CHR “Live 101.5” KALV,
www.insideradio.com www.insideradio.com
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All signs point to Audacy moving out and the land the KOY Building is sitting on being redeveloped:
 
TheBigA said:
No word if Audacy will stay in the building as a renter

www.insideradio.com

Audacy Sells Phoenix Real Estate For $10.5 Million.

Audacy told investors in August that it had lined up a deal to sell some of the land and buildings tied to its Phoenix cluster of CHR “Live 101.5” KALV,
www.insideradio.com www.insideradio.com
Click to expand...

The future of this property does not involve radio or offices of any kind. It will almost certainly be residential and retail, and Audacy will find somewhere cheaper in existing space within midtown Phoenix, downtown, or near the airport—where every other major broadcaster is located.

For people who are reading this and not familiar with the area, this property is adjacent to Roosevelt Row, a rapidly developing and hip arts-and-food district that has taken flight in the last 10+ years. The light rail line runs either side of the property down two one-way streets (First and Central avenues), and it is across the street from a light rail station. The land value has thus escalated in a way more commonly associated with AM transmitter sites; Audacy has no Phoenix AM stations.

This property's history in radio is exceptionally lengthy. In fact, when a radio station set up shop here, there were only two of them in town. KOY has broadcast from this parcel since March 1937—it wasn't even in Phoenix city limits then—and the current building was done for KOY-AM-FM in 1977. A KOY-placed time machine for its supposed 100th anniversary was dug up in December 2021. (Footnote below) It wound up housing not-KOY as a result of all the radio consolidation in the 1990s. (The play-by-play: Sundance bought Edens, bringing 101.5/1230 into the building, in 1993. Colfax bought the Sundance cluster, plus 94.5, in 1996, then sold them to Chancellor. Chancellor then bought KMLE and then made more divestitures in the AMFM–Clear Channel merger.)

(Footnote: KOY's history probably really only goes back to May 1922.)

Equally as indicative of what's coming is the developer. Intersection is hugely active on Roosevelt Row. Among its local projects is a boutique apartment building called Rainbow Road. The Business Journal notes,

Intersection has completed 17 projects in Roosevelt Row and invested more than $300 million in those projects, according to a video on the firm's website.

Intersection and Libeskind Studio Design are also behind Manzana, a 68-unit apartment building off Roosevelt Street with 10,000 square feet of ground floor retail that's set to break ground in early 2025. The project is set to rise adjacent to Intersection Development's office, according to the Arizona Republic, located on the same block as Audacy's radio station.
Click to expand...

This property has Arizona radio history oozing out of it, though really the last time it had meaningful-to-a-generation programming was in the 80s when Bill Heywood was still on KOY.
 
RadioGuy1864 said:
It's better to sell valuable studio land than a station. Once you sell the station, the recurring revenue is gone. Sell the building/land, there's always some place to lease at a reasonable rent--especially today with a lot of people working from home.
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Yet is it better to keep using the valuable land/building rather than move to another facility you have to lease? Plus there's the costs involved with moving the stations/building out new studio space.
 
Deus Ex Machiato said:
Yet is it better to keep using the valuable land/building rather than move to another facility you have to lease? Plus there's the costs involved with moving the stations/building out new studio space.
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I mean, if you need to raise cash, given the choice between selling the stations, or selling buildings, selling buildings is the better option.
 
Deus Ex Machiato said:
Yet is it better to keep using the valuable land/building rather than move to another facility you have to lease? Plus there's the costs involved with moving the stations/building out new studio space.
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Since the Commission did away with local studio requirements a while back, broadcasters are no longer required to have a local studio presence in the city of license. Expect to see consolidation of regional studios and offices going forward. Not just for Audacy, but for other groups as well. Bankruptcy, or not, shedding expensive leases or liquidating commercial property that is no longer needed for basic business operations just makes sense.
 
Deus Ex Machiato said:
Yet is it better to keep using the valuable land/building rather than move to another facility you have to lease? Plus there's the costs involved with moving the stations/building out new studio space.
Click to expand...
Today's operations, as Kelly has mentioned, don't have to be even in the city of license or the market. With new technology, much less space is needed for studios and equipment. Most groups consolidated traffic, production, billing and accounting in centralized corporate offices, so there is little or no need for "back office" space and multiple recording studios. With smaller local staffs, there is often a regional HR officer and many other functions are shared between markets.

So the needed space for a cluster is less than half... or less... of what we would have expected ten years ago.

And commercial real estate in most markets is much more expensive than a decade ago. Good time to sell and then rent. The cost of the move is less than the first year's savings in most cases.
 
DavidEduardo said:
Today's operations, as Kelly has mentioned, don't have to be even in the city of license or the market. With new technology, much less space is needed for studios and equipment. Most groups consolidated traffic, production, billing and accounting in centralized corporate offices, so there is little or no need for "back office" space and multiple recording studios. With smaller local staffs, there is often a regional HR officer and many other functions are shared between markets.
Click to expand...
Of course. Today's "local" radio station can be run by two monkeys with a laptop. And the great thing is that the monkeys will work for bananas. More cost savings!
 
Deus Ex Machiato said:
Yet is it better to keep using the valuable land/building rather than move to another facility you have to lease? Plus there's the costs involved with moving the stations/building out new studio space.
Click to expand...
Many commercial landlords, depending on length of lease, will build out new space to tenants specifications (some of this cost is amortized and built into monthly lease/rent payment) and again, including on length of lease include at least one month’s free rent to help defray moving expenses
 
Larry said:
Many commercial landlords, depending on length of lease, will build out new space to tenants specifications (some of this cost is amortized and built into monthly lease/rent payment) and again, including on length of lease include at least one month’s free rent to help defray moving expenses
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I know tenants who have gotten 6 months of free rent. It's a different world out there now for commercial space.
 
Larry said:
Many commercial landlords, depending on length of lease, will build out new space to tenants specifications (some of this cost is amortized and built into monthly lease/rent payment) and again, including on length of lease include at least one month’s free rent to help defray moving expenses
Click to expand...
They call those TI's or Tenant Improvements. Usually, they're baked into a minimum ten-year, or more, lease.
 
Sammi's comment above underscores how much this is not just simply about cutting expenses. To put in perspective how this is really not a "good look" for Audacy - it would be like if they had an office in a high-exposure location like Mill Ave & University in Tempe and they sold their office space to one of those Carvana buildings (themselves no spring chicken). Audacy's toast - let's be honest.
 
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