Strategic Debt and Real Estate Restructuring Case Study for Colleges

Dan Froehlich – Managing Director, D.A. Davidson & Co.

 

Dan Froehlich, a Managing Director at D.A. Davidson & Co., and Susan Zech, President of American Academy of Dramatic Arts (AADA), will discuss a complex debt and real estate restructuring that the Academy completed in 2025.

In October 2025, AADA completed a $32,590,000 bond issue through the Dormitory Authority of the State of New York and an additional $1,670,000 Taxable Senior Note, which was placed directly with an investor. The proceeds of the bonds and the note were used to refinance AADA's outstanding bank loans. AADA is in the process of consolidating its operations in New York City and is selling its Los Angeles campus.

AADA's primary financing objectives were to refinance the debt associated with its NYC campus on a long-term basis and to refinance the LA debt on a short-term basis until that campus is sold. AADA will use the proceeds from the campus sale to repay the taxable bonds and notes and to bolster liquidity reserves.

D.A. Davidson & Co. served as the placement agent on the transactions and guided AADA through the financing process and identified the bond investor that purchased the bonds and the note.

Dan and Susan will discuss the complex financial and real estate considerations that were factored into the debt restructuring.

Learning Objectives

  • Define unrated, high-yield markets for higher education borrowers.
  • Identify options for colleges with expiring bank financing and the pros and cons of available alternatives.
  • Examine a case study of a college using its real estate assets strategically to best position itself for future operational and academic success.

CPE Available

  • 1 Credit: Finance