Tulane sells Canal Street building will lease highrise back

The arrangement will free up nearly $180 million for the university to spend on other real estate projects.

By STEPHANIE RIEGEL | Staff writer

Tulane University has sold the Canal Street high-rise that is home to its school of public health, part of a deal aimed at freeing up nearly $180 million that the university can put towards its continued expansion.

According to court documents filed Friday, the 26-story building, once home to offshore energy company Tidewater, was purchased by a nonprofit tied to New York-based investment firm Veyron, which has engaged in a number of similar deals with hospitals, universities and other institutions.

Tulane had owned the building since the early 1990s.

The purchase is part of a sale-leaseback, a common real estate transaction in which a seller receives a large upfront payment in exchange for the building and agreeing to a long-term lease from the new owner.

Though the sale price and other details of the deal, including the specific payment amount to Tulane, were not disclosed, court documents show that the nonprofit secured $178 million in bonds to facilitate the deal and will lease the building back to Tulane for an initial term of 15 years with two, 10-year renewal options.

In a statement, Tulane Senior Vice President and Chief Operating Officer Patrick Norton said the sale-leaseback is “part of our ongoing efforts to evaluate a range of financing and real estate strategies that support Tulane’s long-term academic, research and clinical mission, which includes a number of projects and initiatives across our campuses.”

Veyron did not respond to requests seeking comment.

The deal comes as Tulane is rapidly expanding in downtown New Orleans, where its biomedical research and teaching activities are based. The university has spent tens of millions of dollars on projects that are currently under construction or recently completed.

More are planned, including the renovation of the former Charity Hospital, an estimated $650 million project that would transform the area by converting the 1-million square foot building, vacant since Hurricane Katrina, into a complex of offices, lab space and apartments.

Tulane is working to finalize the Charity deal, securing financing and working with the state and the city to line up public dollars for the project. It is still negotiating with 1532 Tulane Partners, the original development team, which stalled several years ago.

Norton said through a spokesperson Monday that the sale of the Canal Street building is not related to the Charity project and that the money raised by the recent transaction will go towards a variety of projects on both campuses, including the “development of academic space, clinical space, administrative space and institutes and centers.”

“Any approach we pursue is designed to strengthen the university’s financial flexibility while allowing us to invest in priorities that drive impact for our students, faculty, researchers, clinicians and the broader New Orleans community,” Norton said.

The university is also engaged in capital projects on its Uptown campus, building new dorms and student apartments, a new science and engineering building and a renovation to the historic Richardson Hall, among others.

The building at 1440 Canal St. was designed in the late 1960s by Kessels-Diboll-Kessels, a prominent architecture firm at the time, and completed in 1971 for Tidewater, then one of the many New Orleans-based companies servicing the oil and gas industry.

In 1993, the company, which has since relocated to Houston, donated the building to Tulane. Today, it houses classrooms, labs and administrative offices for the school of public health, which was renamed for alumna Celia Scott Weatherhead in 2024 following a $160 million donation.

The building is one of several downtown office towers to change hands in recent years. In 2024, the DXC Building, at 1615 Poydras St., sold in a foreclosure sale for $18.5 million.

Last summer, Saints and Pelicans owner Gayle Benson purchased the 27-story 1515 Poydras for a little less than $30 million.

Earlier this year, 400 Poydras, a 32-story tower, sold for $50 million.

The transaction involving the Tidewater building was much larger than other recent sales because it involved Tulane’s commitment to a long-term lease, essentially guaranteeing a steady income stream to pay off the nonprofit owner’s bond debt, according to a real estate source familiar with the recent transaction who wasn’t authorized to discuss it publicly.

Veyron owns 45 buildings around the country worth some $3 billion, according to its website, which notes that having “high credit tenant” is among its investment criteria. Among the firm’s other local assets is the Ochsner Northshore Medical Complex in Lacombe.

Source: TheAdvocate.com and NOLA.com