Mortgages and Newspapers - Real Estate Assets up for sale

There have been numerous recent announcements of newspapers preparing to sell off their real estate. The most famous was the Tribune's announcement they intended to sell the Tribune Tower and Times Mirror Square, home of the Chicago Tribune and the LA Times respectively. Not so long ago, the Deseret News in Utah sold of property to fund employee layoffs. As Bear Stearns recently found out, there are times that the real estate a company holds may actually be the greatest asset of the company.

Historically speaking, most major newspapers were centrally located in a downtown business district. This made perfect sense, as most of the "action" happened nearby and the greatest concentration of subscribers was close. As people began to sprawl and move to the suburbs, quite often plant operations were moved near the new population centers, but the newsgathering remained downtown. As profits were huge during this period, and nearby property declined in value; newspaper companies would purchase nearby assets for parking or other purposes. They could afford to buy up the parcels as they built the empire they were sure would last.

Two factors have dramatically changed, downtown properties are "hot" again while newspaper valuations and profits have plummeted. The Tribune moves are the most notable in the newspaper industry, but I would expect to see plenty more in the coming months. It's one way to "unlock" value, even if not something sustainable.