An all-girls private school on Manhattan’s Upper East Side is planning to borrow a record sum of money to build a state-of-the-art athletics facility, the latest example of the high-stakes competition unfolding among elite institutions that cater to wealthy families.
The Nightingale-Bamford School, which inspired the bestselling books and TV show Gossip Girl, plans to sell $40 million in so-called revenue bonds next week, and use the money to buy land and construct a 64,000-square-foot center along East 108th Street, its offering document showed. The facility, which is expected to cost over $90 million, is part of the 105-year-old school’s first strategic plan solely focused on athletics. It will include an indoor turf field, a dance studio and multiple gymnasiums.
“As the New York City independent school market becomes more competitive, schools are incentivized to enter into the facilities arms race to one-up each other to make sure that their facilities are attractive to potential students,” said Chad Tew, a consultant who advises school leaders on financial matters, including enrollment and exploring mergers and acquisitions.
Nightingale is one of a clutch of elite, all-girls schools on the Upper East Side — alongside Brearley, Spence, Chapin and Hewitt — that has historically educated the children of New York City’s upper echelons. Founded in 1920, the school, with its famous blue doors, charges $64,470 in a year in tuition and currently enrolls 716 girls from kindergarten through 12th grade.
In recent years, elite college-prep schools like Nightingale have gone deeper into debt to renovate their campuses and expand their offerings in hopes of attracting and retaining kids whose families who are able afford the spiraling cost of private-school education.
“This facility will deliver on Nightingale’s commitment to providing a world-class education for girls,” said Thomas Hein, Nightingale’s director of communications.
Although Nightingale has seen enrollment jump 25% over the past decade — largely insulating itself from declining enrollment trends plaguing public schools across the country — that growth hasn’t been enough offset the industry’s ever-rising expenses. The school, which has roughly $100 million in its endowment, had a deficit of $2.9 million last year as costs for salaries and new hires increased, its bond documents showed.
Moody’s Ratings lead analyst, Meredith Saylor, noted that the school’s history of increasing tuition shows “considerable pricing power and demand.” The school raised tuition by 5% in fiscal 2024 and plans to push up fees 6% in September — one of the biggest increases among the city’s top private schools.
Nevertheless, Moody’s assigned the bonds a rating of A3 — four steps above junk — downgraded the school’s credit score a notch, and revised its outlook to negative from stable, due to the “material increase in debt” that Nightingale is taking on to build the athletics facility. The interest on the bond will be set next week, and will be based on investor demand and market conditions.
The school has “aligned all of our financial practices to secure an exceptional education for girls today and in the future,” Hein said in response to the Moody’s downgrade and the recent tuition increases.
In addition to unsecured bond offering, which is tax-exempt and will mature in 2042, the school will enter into a short-term loan from JPMorgan Chase & Co. later this year for as much as $20 million. The loan will be repaid by donation pledges, per disclosures. The school also took out a $7 million loan from one of its trustees in January that comes due next month, partly to finance the cost of acquiring the land where the new facility will be built.
Nightingale already has $24 million in debt outstanding. Those bonds were issued in 2013 with an interest rate of 2.5% through a direct placement deal with First Republic Bank, one of the most active lenders to elite schools prior to its 2023 collapse. The older debt is secured by a pledge on the school’s revenues, assets and real estate, bond documents show.
So far, Nightingale has raised more than $18 million in donations earmarked for the new athletics project, according to its presentation to investors. The school expects to begin construction later this year.
The bonds are expected to price the week of June 9 and will be issued by Build NYC Resource Corp.
