Would arena operating income, given the success of the the arena so far, stabilize before the projected 2016?
Responded CEO David LaRue, "We’re still anticipating a 2015-16 stabilization [cited in year-end results]... That’s the hockey season, when the Islanders finally move in... we have projected that $70 million stabilized NOI [net operating income] number once the Islanders are and we have the benefit of that initial anchor."
That seems to suggest that the rent from the Islanders will be key to stabilizing the operating income. But the Islanders' move was not guaranteed when they decided to build the arena at the cost projected. Presumably arena operators figured they could/would do something to increase occupancy.
"In terms of ramping up, between now and then," LaRue added, "I think the 82% of the contractually obligated rent being signed us to have a substantial increase in our revenues over the course of this 2013 operating year and move towards that stabilized projection. So, without giving you that exact number, we are on track moving towards that stabilized $70 million annual."
Everything's for sale
At one point, discussing the developer's business decisions to bring in new investors and to divest in non-core markets, CFO Bob O'Brien observed, "I often say that everything is ultimately for sale, at a price, and if we can get full value in some of our core markets or products, that's what we would consider."
I think it's safe to say that, not only was the Nets basketball team for sale, at a bit of a fire sale price, when the developer needed capital, the remaining 20 percent of the Nets will be sold when the price is right.
Not to mention a piece of Atlantic Yards.
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