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Real estate investment trusts

Goldman Sachs Resigns from Rockefeller Center Properties Board Amid Ongoing Sale Negotiations

Strategic Insights

— 1 min read

Daniel M. Neidich, a partner at Goldman, Sachs & Company, has resigned from the board of Rockefeller Center Properties Inc., citing concerns over potential conflicts of interest and fiduciary obligations. Neidich's resignation comes as negotiations towards a sale of the property heat up, with various parties seeking to purchase a controlling stake in the landmark development. Goldman and its Whitehall Real Estate Fund have a significant stake in the trust, having lent it $225 million last year to bail it out of a cash squeeze.

Key Takeaways:

  • Goldman Sachs and Whitehall Real Estate Fund have resigned from the board of Rockefeller Center Properties Inc. due to concerns over potential conflicts of interest and fiduciary obligations.
  • The resignation comes as negotiations towards a sale of the property heat up, with various parties seeking to purchase a controlling stake in the landmark development.
  • Goldman Sachs has a significant stake in the trust, having lent it $225 million last year to bail it out of a cash squeeze, and has warrants and stock appreciation rights that give it a call on a 20 percent stake in the trust.
  • The trust owes Goldman about $35 million on September 1, which could be leveraged as a means to influence the sale negotiations.
  • Whitehall Real Estate Fund is concerned that the trust's board would sell the property for too low a price, and believes that the pieces of Rockefeller Center would be worth more as stand-alone properties than as part of a whole.
  • The sale of the property has been ongoing since the Mitsubishi Estate Company, a Japanese investment company, decided to stop covering the gap between rental income and the payments it owed on the mortgage.

Statistics:

  • $225 million: The amount lent by Goldman Sachs and Whitehall Real Estate Fund to Rockefeller Center Properties Inc. last year.
  • 20 percent: The stake on the trust that Goldman Sachs has a call on via its warrants and stock appreciation rights.
  • $35 million: The amount that Rockefeller Center Properties Inc. owes Goldman Sachs on September 1.
  • 80 percent: The stake in Rockefeller Center that the Mitsubishi Estate Company holds.

Sources:

  • "Goldman Exit Leaves Rockefeller Center Board Without Representative of Interests of Interested Parties" by Louise Story, _The New York Times_, no date.
  • "Rockefeller Center's Bankruptcy Filing PutsFuture Uncertainty" by _Reuters_, 06 May 2023.

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