Tuesday, December 30, 2003

IRS Issues Field Service Memorandum for Restaurant Depreciation

WASHINGTON, DC - December 24, 2003 - NACS Online

The IRS issued a Field Service Memorandum on December 8, 2003, to its audit staff to provide direction when examining the depreciation deductions of businesses operating restaurants. Although the Field Service Memorandum is directed specifically to the restaurant industry, the guidelines include information that is also applicable to other retail businesses.

The directive includes a matrix that recommends the categorization and general depreciation system guidance for assets used in a restaurant business. The matrix sets out descriptive information for categorization of beverage equipment, fire-protection equipment, lighting fixtures, canopies, kitchen equipment, floors and floor coverings, security systems, landscaping, and other similar items. In many instances, IRS categorizes these items as ADR Class 57.0--Distributive Trades and Businesses with a five-year recovery period.

For more information about the IRS Field Service Memorandum, contact NACS Tax Counsel Allan Weiner at aweiner@colliershannon.com or (202) 342-8431.

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Siemens Completes $30.1 Million Sale Leaseback of HQ in Arlington, TX

NEW YORK, Dec 30, 2003 /PRNewswire-FirstCall via Comtex

Lexington Corporate Properties Trust (NYSE: LXP), a real estate investment trust, today announced that it has acquired an office/R&D facility in Arlington, Texas. The purchase price was approximately $30.1 million.

The property consists of two newly-constructed adjacent but separate buildings -- a three-story office building and a single-story R&D facility, that contain 160,016 square feet and 73,767 square feet, respectively. The property, which will serve as the headquarters of Siemens Dematic Postal Automation ('Siemens'), is net-leased to Siemens through January 2014. Lexington has arranged for a $22.0 million non-recourse first mortgage secured by the property. The loan is expected to bear interest at a fixed interest rate of 5.81% and mature in ten years. Sphere: Related Content

McGraw-Hill Completes Sale Leaseback of Rockefeller Center HQ

NEW YORK, December 29, 2003 /PRNewswire-FirstCall

The McGraw-Hill Companies (NYSE: MHP - News) announced today that it has sold its 45% interest in Rock-McGraw, Inc., which owns the Corporation's headquarters building at 1221 Avenue of the Americas, New York City, to SL Green Realty Corp. (NYSE: SLG - News) in a transaction valued at $450 million for its 45% interest.

The Corporation will remain an anchor tenant of what will continue to be known as The McGraw-Hill Companies building and will continue to lease space from Rock-McGraw, Inc. under an existing lease for the next 17 years. The Corporate headquarters offices and two of its businesses, BusinessWeek and Standard & Poor's Corporate Value Consulting, remain at the Rockefeller Center location. In line with this strategy, The McGraw-Hill Companies has long-term leases, rather than ownership interests, at many of its major offices, including 2 Penn Plaza and 55 Water Street in New York City and its new London headquarters at Canary Wharf.

As a result of this sale, the Corporation expects to record a gain of approximately $131 million ($58 million after-tax) during the fourth quarter of 2003. Pursuant to sale-leaseback accounting rules, a gain of approximately $212 million ($126 million after-tax) will be deferred and amortized over the remaining lease term largely as a reduction in rent expense. The Rockefeller Group maintains its 55% ownership of Rock-McGraw, Inc., and will continue to manage the building. Sphere: Related Content

Wednesday, December 24, 2003

Employers Reinsurance Completes $79.3 Million Sale Leaseback

NEW YORK - December 23, 2003 - PRNewswire-FirstCall

Lexington Corporate Properties Trust (NYSE: LXP), a real estate investment trust, today announced that it has acquired two properties from Employers Reinsurance Corporation ('ERC') for approximately $79.3 million. At the closing, the properties, located in Overland Park, Kansas and Kansas City, Missouri, were leased back to ERC for fifteen years. ERC is a wholly-owned subsidiary of General Electric Company.

The Overland Park, Kansas property is a two-to-five story 320,198 square foot office/headquarters facility located on a 26.2 acre site. The purchase price was $53.7 million. The Kansas City, Missouri property is a three-story 166,641 square foot office facility situated on a 7.2 acre site. The purchase price was $25.6 million. Sphere: Related Content

USAA Weighing Sale Leaseback of Four Regional Offices

The Virginian-Pilot, Norfolk, Va. - December 22, 2003

USAA, the diversified provider of insurance, investment and banking services, said it is weighing the possible sale of its four regional offices, including one in Norfolk, as a way to enhance its financial condition. The San Antonio-based company said the proposal to sell the buildings and lease them back from a buyer would free up assets that USAA could put into revenue-generating investments. If it acts on this plan, a transaction would likely occur this summer, USAA said in a statement.

The proposed sale and leasing arrangement, it said, are contingent on receiving an attractive offer. USAA said it would maintain control over operations at the four buildings and lease them back through long-term, renewable contracts. The other three offices are in Tampa, Fla., Colorado Springs and Sacramento, Calif.

USAA opened a temporary mid-Atlantic regional office in Norfolk in 1989. Three years later, the office was moved to a complex that USAA built on Northampton Boulevard near Military Highway. The main building, with 340,666 square feet of space, a parking garage and a child-care center, are surrounded by a 33-acre campus. The property's assessed value is $25.3 million, said Karen Gulbranson, a USAA spokeswoman in Norfolk.

Instead of broadening its network of regional offices as it once planned to do, USAA has been realigning its regional structure and building a large operations facility in Phoenix. That facility and USAA's headquarters and operations center in San Antonio are not part of the proposed sale-leaseback transaction.

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Tuesday, December 23, 2003

Wells to Buy Blue Cross HQ in Philadelphia for $200 Million

Philadelphia Business Journal - December 19, 2003

Wells Real Estate Funds will buy Independence Blue Cross' headquarters building at 1901 Market St. for an estimated $200 million. Wells Real Estate Funds, a firm that focuses on buying premier office and industrial properties, bought the 840,000-square-foot building for roughly $250 a square foot from the real estate affiliate of Prudential Financial. The purchase is the first in the Philadelphia market for the Georgia firm.

Independence Blue Cross constructed the 50-story blue-glass tower in the late 1980s for $190 million. The structure was constructed during a Philadelphia building boom in the late 1980s and early '90s that was sparked by the signature One Liberty Place.
The IBC building allowed the insurer to consolidate its workers into one site. At the time, the company had about 1,500 employees spread between Centre Square and the Weidner Building.

The building was developed by Linpro Co., a Berwyn real estate company that no longer exists. Linpro and IBC were initially partners in the project, but the insurer bought out the real estate company's interest in 1987. The building is adjacent to 1919 Market, a vacant lot on which Linpro had originally intended to construct another tower that would complement the IBC skyscraper. The 33,746-square-foot plot, which remains vacant, is now owned by UJF Bank of Tokyo and is on the market.

IBC sold the building in the mid-1990s to Prudential for an undisclosed amount. It's believed by local real estate sources that the sale price at the time was around $150 million. The insurer will decline comment until the sale between Prudential and Wells has been finalized.

Wells Real Estate buys properties that are leased long-term -- seven to 12 years -- to preferably a single tenant that is of Fortune 500 caliber. It typically buys in major and secondary U.S. cities. The firm also deals in cash, closing transactions within 45 days. The IBC tower fits Wells' investment agenda. IBC has a lease on the property for more than 10 years at rents that are estimated to be in the mid-$30s per square foot. The acquisition is likely to be completed by the end of the year.

The building, which is reminiscent of the nondescript glass office towers commonly found in Houston, received some notoriety in 1997 when Alain "Spiderman" Robert, a French daredevil who became famous for scaling tall buildings, climbed 44 stories of the high-rise before he was dragged in by police waiting on a balcony. In true Philadelphia spirit, Robert had a "Go Eagles, Beat Dallas" banner while he climbed the building. Before attempting the IBC building, Spiderman had scaled the Empire State Building as well as Kuala Lumpur City Centre in Malaysia.

Officials from Wells and Prudential couldn't be reached for comment.

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Saturday, December 20, 2003

Senate Finance Committee to Stop Leveraged Lease Deals of Tax-Exempt Property

The Bond Buyer recently reported that Senate Finance Committee chairman Charles Grassley, R-Iowa, is threatening to add a retroactive effective date to a provision in a pending corporate tax bill that would prevent leveraged lease deals of tax-exempt property The move has halted an estimated $2 billion worth of lease transactions involving public transit and other municipal and state owned assets that are in the pipeline. The provision to stop leveraged leases is one of several abusive tax shelter initiatives included in the corporate tax bill, which was approved by the Senate Finance Committee on Sept. 18 and sent to the full Senate on Nov. 7.
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Caterpillar Enters Sale Lease-Back of 2.9 Million SF Industrial Complex in Illinois

OAK BROOK, Ill., Dec 16, 2003 /PRNewswire-FirstCall via COMTEX/

CenterPoint Properties Trust (NYSE: CNT) announced the acquisition of four buildings purchased from Caterpillar Inc. (NYSE: CAT). The 2.9 million square feet of industrial space is located on 280 acres just east of the I-55/I-80 intersection adjacent to the Empress Casino on the Des Plaines River in Joliet, IL.

Caterpillar is the world's largest producer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The four building industrial complex is home to Caterpillar's hydraulics and hydraulic systems manufacturing process, one of the core components of its earth moving equipment. Caterpillar has signed a long-term lease with CenterPoint to continue operations at the site. Sphere: Related Content

Sunday, December 14, 2003

Deutsche Bank to Sell And Leaseback 51 European Properties to Blackstone Group for $1.23 Billion

International Herald Tribune - November 25, 2003

Deutsche Bank has agreed to sell 51 European properties to the U.S. private-equity firm Blackstone Group to raise funds for its banking business. The assets comprise a mixed real estate portfolio of 51 bank branches and offices in nine jurisdictions across Europe with a total lettable area of around 490,000 square metres. About two-thirds of the buildings are in Germany, such as Berlin, Düsseldorf, Frankfurt and Munich. The remaining properties are in major European cities including Barcelona, Brussels, Lisbon and Milan.

The deal, valued at E1.04 billion, or $1.23 billion, includes office buildings in German cities like Frankfurt and Munich, as well as in Barcelona, Brussels, Lisbon and Milan, said Klaus Thoma, a Deutsche Bank spokesman. The company expects to book a loss of about E100 million on the sale which will be completed by the end of the year. The bank is selling and leasing back the properties now to take advantage of "cheap" rental prices, Thoma said. The company said most of the proceeds will be used for its banking business, without providing specifics.

Deutsche Bank, under its chief executive, Josef Ackermann, has been selling or finding partners for businesses to free funds to invest in banking operations after the industry had its worst year since World War II in 2002. The bank said it would lease back most of the property it is selling, adding that it may reduce its real-estate holdings further.

'This sale fits in with Deutsche Bank's strategy to sell assets, and I expect more significant sales of other stakes to come up soon,' said Wulf Weiler, an analyst at WGZ-Bank. The sale allows for the flexible management of the bank’s future occupational requirements, locking in rents at a tenant friendly low point in the letting cycle.

For New York-based Blackstone, which manages the world's largest buyout fund, the purchase marks the biggest property acquisition the firm has made on its own, according to Chad Pike, who runs the company's European real-estate operations. Blackstone has invested in more than 100 real-estate assets, valued at $13 billion, since 1992. It has four property funds, representing a combined $4 billion, for investment in the United States and Europe. Sphere: Related Content

Singapore's Blue Chips Pursuing Sale & Leaseback of Property Assets

The Business Times - November 26, 2003

Having a flagship piece of real estate used to be the pride and joy of many companies, but increasingly, these properties are being put on the market. And high-profile names feature prominently in the divestment game. 'We've seen this happening for a while now,' said Kim Eng research head Seah Hiang Hong. 'Previously, companies thought there were capital gains to be had, besides buying property for their own use. But the scenario has changed with the property market being depressed for so long.'

Singapore Telecommunications is putting its exchange site in Old Holland Road up for tender, while media giant Singapore Press Holdings has sold its historic Times House site to Marco Polo Developments for $118.88 million.

Fashion retailer FJ Benjamin, too, is looking for buyers for its prime Orange Grove Road headquarters.TT International, which makes consumer electronic products under the Akira brand, let go of its flagship TT International Tradepark in Toh Guan Road to Ascendas Real Estate Investment Trust (A-Reit) for $92 million. In turn, TT is leasing back the property for 10 years.

Osim and Ultro Technologies also entered into sale-and-lease-back agreements with A-Reit for their name-bearing properties.

'Previously, companies bought property out of security, afraid that they may one day get booted out when rents rise,' says DTZ Debenham Tie Leung executive director Ong Choon Fah. 'But with rents being soft now and the proliferation of sale-and-lease-back agreements, there is no such fear.' Sphere: Related Content

Deutsche Bank Acquires Freshfields Bruckhaus Deringer HQ in London for $162.1 Million

LONDON, Sept 24, 2003 (Reuters)

In a further sign that investors are returning to the depressed City of London office market, Deutsche Bank Real Estate said it has purchased Northcliffe House in the financial district for 141 million euros ($162.1 million).

Northcliffe House, with 18,000 square metres of office space, was completed in December, 2001 and was bought from British Clerical Medical Investment Group and an affiliate of the U.S. TIAA-CREF investment group. Its long-term tenant is the law firm Freshfields Bruckhaus Deringer. Deutsche said it had purchased the building for its grundbesitz-invest open-ended fund, which has 10 billion euros in assets. Deutsche Bank Real Estate is the world's largest property investment manager with total assets of around 48 billion euros.

'The commercial property market in the UK is currently one of the more attractive ones in Europe. DB Real Estate plans further investments in this country,' Kurt Muller, managing director of acquisitions at DB Real Estate said. The City of London office market is in the depths of the worst slump since the recession of the early 1990s, with rents falling over 15 percent in the first half of this year, due to the mass shedding of financial services jobs since 2000. But a number of high profile investors have recently ventured into the market in anticipation of a recovery in rents from 2004/05 as the supply of new office developments dries up and as global economic recovery gathers pace. " Sphere: Related Content

Eddie Bauer Seeking Sale & Leaseback of HQ Near Seattle

The Seattle Times - November 20, 2003

The Spiegel Group, parent company of Eddie Bauer, asked a bankruptcy court Monday for permission to sell its 18.2-acre property at 15010 N.E. 36th St., Redmond. The judge is expected to rule Nov. 25. The Downers Grove, Ill.-based Spiegel filed for Chapter 11 bankruptcy protection in March and has closed customer and distribution centers and dozens of Eddie Bauer stores. The chain now has 468 stores, down from 574 a year ago. The company could lease back some or all of the campus, keeping the headquarters there, or it could move its 550 employees somewhere else.

The three-building campus, home to Eddie Bauer since 1972, was rebuilt in the 1990s and is worth about $33 million, said Steve Sutherland, a vice president at CB Richard Ellis in Bellevue who will handle the sale. Real-estate investors and neighboring companies, including Microsoft, have expressed interest in the property, which is nearly surrounded by the software giant.

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Saturday, December 13, 2003

Irish Investors Buying Lloyds of London HQ for £240 Million

Property Week - December 12, 2003

A syndicate of Irish investors is set for one of the biggest investment deals of the year by buying the landmark Lloyds of London headquarters. The Richard Rogers-designed building on Leadenhall Street, EC3, is being sold by German open-ended fund Deka and has been placed under offer by the consortium at close to the asking price of £240m.

The deal will be one of the biggest purchases by an Irish syndicate, the members of which are unknown. It is close in value to the £246.5m deal to buy Goldman Sachs' Fleet Street HQ by a consortium led by Dublin accountant Kevin Warren and Green Property in 2000. Irish investors are hugely active in the UK property market. In a report issued this week, Irish agent Lisney said a record ¤2bn (£1.4bn) was expected to be invested overseas by Irish investors this year, and 90% of that is being spent in the UK.

The Lloyds building, which totals 310,000 sq ft (28,800 sq m) and was completed in 1986, is one of the best-known examples of modern architecture in the country. There had been speculation that Lloyds was trying to buy back the building, having sold it to Deka in 1996. However, it would have been difficult for the institution to be seen to be buying it back. It only sold the building to Deka, at that time known as Despa, for £180m, in a sale-and-leaseback deal under which Lloyds took a 30-year lease.

Any deal now would require Lloyds to pay at least £50m more to buy it back. 'We're not involved in any plans to buy the building,' said a Lloyds spokesman this week. The bid to sell is unusual for Deka which, along with the other German open-ended funds, has been an active acquirer of well-let UK office buildings. In recent months it has bought two buildings from Prudential in the City for a total of more than £300m.

FPDSavills and CB Richard Ellis are advising it on the sale.

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Thursday, December 11, 2003

HRPT Closes $480 Million Acquisition of Net Lease Portfolio in Hawaii

NEWTON, Mass., Dec 5, 2003 (BUSINESS WIRE)

HRPT Properties Trust (HRP) today announced that it has acquired the Damon Estate commercial and industrial lands in Oahu, Hawaii for $480 million. As previously announced, the Damon Estate commercial and industrial lands consist of 9,754,828 square feet of land primarily located between Honolulu International Airport and Honolulu Harbor, within a short distance (between 0.5 and 5 miles) from the Honolulu Central Business District. Approximately 99% of the Damon lands are leased to 137 tenants (under 186 separate leases) who have developed various buildings and businesses on their leaseholds.

Because of their location, most of the Damon lands were originally developed for warehouse uses. However, since their historical uses were first developed, many parcels have been redeveloped as shopping centers and other commercial uses. The triple net rents payable by tenants of the Damon lands in 2004 is expected to be approximately $37.5 million/year, which amount includes about $2 million/year of non cash average rents which will be received in the future as a result of contractual rent increases and are reported as income under generally accepted accounting principles, or GAAP. Under the lease terms, the tenants are generally responsible for all land operating costs and liabilities, including environmental liabilities.

The average remaining tenant lease term for the Damon lands is approximately 22.3 years. No leases expire before 2009, when 9 leases for a total of approximately 400,000 square feet will expire. Many of the Damon land leases provide that rents are periodically reset to market rates, usually every 5 to 10 years. HRPT has acquired the Damon lands free and clear of mortgage debts. Some of the land tenants have borrowed money secured by their leasehold interests to develop their leaseholds or operate their businesses, but all of these tenant leasehold mortgages are subordinated to HRPT's land ownership.

HRPT's current business plan for the Damon lands is to work with existing tenants to offer extended lease terms in return for rental adjustments. If acceptable arrangements are not agreed with existing tenants and as leases expire, HRPT then expects to offer the various parcels for lease, sale or redevelopment for their respective highest and best uses.

HRPT has funded this purchase using cash on hand and drawings under its unsecured revolving bank credit facility. HRPT is currently considering various alternatives for re-financing outstanding amounts under its revolving bank credit facility on a long term basis. HRPT Properties Trust is a real estate investment trust headquartered in Newton, Massachusetts, which primarily owns approximately 26 million square feet of office buildings located throughout the USA.

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SCOR to Sell & Leaseback HQ Building in Paris la Defense Financial Complex

Insurance Journal - December 1, 2003

France's SCOR Group will hold an Extraordinary General Assembly meeting today, conducted by Chairman Denis Kessler to confirm plans to raise additional capital. The announcement, which is not for publication in the USA, Canada, Japan and Australia, due to securities laws, will confirm that the group intends to raise 750 million Euros ($896 million) in a rights offering to existing shareholders. The amount is a significant increase over the iniutal plan to raise 600 million euros ($717 million).

SCOR said that certain SCOR shareholders have confirmed their intention to subscribe for an amount of 300 million euros ($358.5 million), the remainder to be guaranteed by a bank syndicate. French insurer Groupama owns around an 18 percent stake in SCOR, and has said that it would participate in the rights offer.

The bulletin also indicated that the company has finalized its real estate asset sale program, which involves selling its building in Paris la Defense financial complex, and taking it back on a long term lease. In addition SCOR said it has finalized the sale of two Parisian residential buildings and one office building in Madrid. Sphere: Related Content

Fitch Issues Presale Report On GE Business Loan Trust 2003-2


Fitch Ratings has issued a presale report on GE Business Loan Trust 2003-2 discussing the rating analysis behind Fitch's expected 'AAA' rating on the class A certificates, expected 'A' rating on the class B certificates, and expected 'BBB' rating on the class C certificates. The securities are backed by a pool of conventional small business loans and Small Business Administration Section 504 Program loans. The loans are secured by first liens on owner-occupied, single tenant retail, office, industrial, or other commercial real estate. None of the underlying business loans are insured or guaranteed by any governmental agency.

The loans were originated by General Electric Capital Business Asset Funding Corporation and the Small Business Finance (SBF) lending division of General Electric Capital Corporation. This transaction represents the second term securitization of loans originated by those business units. The presale report is available to all investors on Fitch's corporate site, 'www.fitchratings.com' or by contacting Sara Grohl at 1-212-908-0564 or via e-mail, 'sara.grohl@fitchratings.com'. Sphere: Related Content

L & J Schmier Buys Aurora Loan Services HQ in Denver for $29.5 Million

The Denver Business Journal - December 1, 2003

L & J Schmier Management and Investment Co., a private investment firm with offices in Florida and Michigan, has purchased ParkRidge Six, a 161,218 square-foot office building in southeast suburban Denver for $29.5 million. The building, at 10350 Park Meadows Drive in the ParkRidge Corporate Center, is leased on a long term basis to Aurora Loan Services Inc. (ALS), a subsidiary of Lehman Brothers.
The building was originally built as by the Patrinely Group LLC in 2001 as a build-to-suit for financial management firm American Century. Earlier this fall American Century entered into a long-term lease with ALS. This acquisition is L & J Schmier's first in metro Denver. Crimson Financial represented the seller, ParkRidge Six LLC, a subsidiary of Patrinely Group and Apollo Real Estate Advisors LP.
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US Govt Dedicates First Building of 2 Million SFHQ Facility in Alexandria, VA

WASHINGTON, Dec 02, 2003 /PRNewswire via COMTEX

The U.S. General Services Administration (GSA), in partnership with the U.S. Patent and Trademark Office (USPTO) and LCOR Alexandria, LLC (LCOR), today dedicated the Remsen Building, the first building of the USPTO's new consolidated headquarters facility in Alexandria, Virginia. Named for Henry Remsen, Jr., Chief Clerk of the first Patent Board, the new structure is the first of five buildings to be completed. The new USPTO headquarters facility consolidates space in eighteen leased buildings from Crystal City, Virginia, to an interconnected complex.

LCOR is the developer and lessor for the facility that will total almost 2 million square feet and house 7,100 USPTO employees. Located on the Carlyle site in Alexandria, the new headquarters is located in the 'smart growth' development area of the city. The Remsen Building represents the initial 385,000 square feet of office space. The complex will include a 12-story atrium signature building; four handsome supporting office buildings will flank the signature building. According to Assistant Regional Administrator for Public Building Service Anthony E. Costa, "GSA has worked closely with USPTO on consolidation plans for more than a decade. The entire complex will house all headquarters employees by spring 2005 in a campus-like setting with five linked buildings and two parking structures in a U-shaped configuration." With approximately half of USPTO employees commuting via public transportation (the highest of any federal agency), the complex is within walking distance of the King Street and Eisenhower Avenue Metrorail stations as well as the King Street VRE commuter train station.

The project represents the largest lease ever signed by GSA. Sphere: Related Content

Wells Buys $347 Million in Single Tenant Properties From Beacon Capital Partners

Washington Business Journal - December 1, 2003

Beacon Capital Partners sold four offices to completing one of the largest portfolio sales in the D.C. market this year and cutting its local portfolio to one building. Atlanta-based Wells bought two downtown offices, one in Southwest and one in Arlington for a total of 1 million square feet. The sales price was roughly $347 million, say sources in the market.

Beacon, a firm out of Boston, bought all four buildings in 2002 from various owners for about $278.5 million. Each of the buildings has low vacancy, is in a popular location and has long-term leases. The downtown offices, at 1201 and 1225 Eye St. NW, total about 493,000 square feet and are almost entirely leased. General Services Administration is the anchor tenant in both. The Southwest office, at 400 Virginia Ave., is 215,000 square feet and leased to Lockheed Martin. And the Northern Virginia building, at 4250 N. Fairfax Drive in Ballston, is 306,000 square feet with a long-term lease to Qwest.

"Beacon is a savvy real estate investor," Kaye says, "and they're taking advantage of capital market timing." In the past three years, Beacon bought and sold Canal Center Plaza, a four-building campus in Alexandria, and 700 13th St. NW. Beacon's only remaining D.C.-area office is in Georgetown, 2445 M St. NW, which will be filled by the Advisory Board. A company spokesperson says the building is not on the market, but sources say once the Advisory Board moves in and stabilizes the building's vacancy, it likely will be.

Wells (www.wellsref.com) is a national real estate investment management firm that buys existing Class A office and industrial properties, corporate sale-leasebacks and build-to-suit projects. Its investment focus is on well-placed, secure projects. In this market, Wells owns 250 E St. SW. The building, called One Independence Square, totals 337,794 square feet and was purchased from Boston Properties last year. Wells also owns 150,000 square feet of office space at 11109 and 11107 Sunset Hills Road in Reston.

This Beacon sale nearly triples the top sales transaction of 2002, according to Washington Business Journal research.

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Met Life Selling Manhattan HQ of Credit Suisse First Boston for $675 Million

New York Post Online Edition - December 4, 2003

The giant art deco office tower known as 11 Madison Ave., an icon of the Midtown South skyline, is being sold to Tamir Sapir, owner of litigation-scarred 2 Broadway. Met Life, which built and still owns the 1932 skyscraper, is selling it for $675 million. That's about $310 per square foot for the 2.2 million-square-foot structure, which is the Manhattan headquarters of Credit Suisse First Boston.

If the deal closes by year's end, as expected, it would be the second-largest Manhattan investment sale this year, behind the $1.4 billion sale of the GM Building to Harry Macklowe. Sources said the catalyst for the deal was investor David Werner, who has initiated other purchases for Sapir but who typically does not have a significant equity stake. Sapir's offer for 11 Madison Ave. beat out a field that included S.L. Green, Tishman Speyer, German fund Jamestown, and Aby Rosen's RFR Realty. Sapir could not be reached. Werner declined comment, referring calls to Eastdil broker Douglas Harmon, part of the Eastdil-Lehman Bros. brokerage team that represented Met Life - but Harmon did not return a call.

The 30-story tower is one of those buildings that looks like a landmark but isn't. Filling the whole block between Madison Avenue and Park Avenue South between 24th and 25th streets, its stepped facades loom like Art Deco cliffs over Madison Square Park. CSFB moved into 11 Madison in the 1990s and occupies about 1.5 million square feet.

Sapir, an immigrant from Georgia, also owns 260 and 261 Madison Ave. At 2 Broadway, he was embroiled in lawsuits with the MTA over the agency's long-term net lease of the tower and its costly renovation. The MTA and Sapir's company, ZAR Realty, settled the matter last month. Sphere: Related Content

JP Morgan to Securitize $467 Million in Mortgages Used to Finance Sale-Leaseback With France Telecom

Commercial Mortgage Alert reports that J.P. Morgan Chase plans to securitize 400 million euros ($467 million) of mortgages that it provided to a Morgan Stanley partnership to finance a sale- leaseback transaction with France Telecom. The deal is backed by mortgages and leases on 457 French properties - mostly telephone switching stations with some attached office space - that France Telecom sold to a partnership between Morgan Stanley Real Estate Fund and Fonciere des Regions, a Paris- based property firm.

France Telecom, Europe's second-largest telephone company, leased the properties back for six to nine years. The company agreed to the sale last year as part of a drive to reduce its debt load. J.P. Morgan beat out Deutsche Bank for the mortgage assignment. The property sales - and loans - were completed in three stages, finishing in June. A happy result of the long lag before the launch of the CMBS deal is that France Telecom's debt-reduction program has won favor with investors and analysts. This should help J.P. Morgan get better prices for its bonds, whose ratings will be tied to France Telecom's creditworthiness. S&P raised the company's corporate credit rating to 'BBB' (from 'BBB-') in May, following a series of down-grades over the previous six years. Moody's announced last month that it may upgrade its rating of 'Baa3.' Sphere: Related Content

Rotch to Refinance Pounds 300 Million Office Portfolio Leased to British Telecom

Commercial Mortgage Alert reports that Rotch Property will tap the commercial MBS market to refinance a 788,000-square-foot portfolio of office properties in the U.K. ABN Amro and UBS will co-lead the 300 million pound ($510 million) offering. The five office properties that serve as collateral are leased to British Telecommunications through 2031.

Rotch, a London firm, bought the portfolio last year from a joint venture between Land Securities Trillium and William Pears Group. The Land Securities partnership bought the properties in 2001 along with a huge portfolio from British Telecom, which leased them for 30 years. Rotch will use the proceeds of the lease-backed transaction to retire a maturing one-year acquisition loan from an unidentified London bank. The term of the bonds will match the remaining term on the leases to British Telecom, which is rated Baal/A3 by Moody's and S&P. Rotch is eager to arrange long-term financing in order to capitalize on the prevailing low interest rates. Two of the properties are located just outside London, while the others are in Glasgow, Belfast and Edinburgh. Sphere: Related Content

Wednesday, December 10, 2003

Deka Buys Goldman Sachs UK HQ for Pounds 200 Million

November 12, 2003 - Holland Real Estate

Prudential has sold Christchurch Court, the headquarters of Goldman Sachs, to the German open-ended fund, Deka, for nearly Pounds 200m. The 300,000 sq ft building, on 15 Newgate Street EC4, is let to Goldman Sachs for a further 17 years. The US investment bank is paying a rent in the high Pounds 40s, meaning that the sale price reflects a yield of around 6.5%. A source close to Prudential commented: "The Pru decided to cash in on the German appetite for well-let buildings on long leases." Deka is also set to buy Prudential's Atlantic House at 45-50 Holborn Viaduct, EC1, for over Pounds 110m. The 244,000 sq ft office building is currently let to Lovells. CB Richard Ellis and FPDSavills are advising Deka. Sphere: Related Content

Canary Wharf Agrees to sell Citigroup and Credit Suisse First Boston UK HQs to Royal Bank of Scotland for Pounnds 1.1 Billion

Freeman News - December 8, 2003

In one of the biggest property deals ever seen in the UK, Canary Wharf has agreed to sell two buildings to Royal Bank of Scotland for Pounds 1.1bn. Wholly owned subsidiaries of RBS paid a total of Pounds 1.112bn for the two properties - 25 Canada Square, occupied by Citigroup, and 5 Canada Square, occupied by Credit Suisse First Boston.

The 1.2m sq ft 25 Canada Square was valued at Pounds 690m on 30 June 2003, and generates Pounds 44.9m a year in rent. 5 Canada Square totals 515,000 sq ft, was valued at Pounds 327m in June and provides an annual rent of Pounds 19.7m. The disposals will increase Canary Wharf's net asset value by around Pounds 8m, its adjusted NAV by Pounds 32.1m and its triple NAV by around Pounds 71.1m. Canary Wharf's adjusted triple NAV is likely to fall by about Pounds 96.5m.

The deals still need to be approved by Canary Wharf shareholders, and an extraordinary general meeting will be held on 22 December in order for voting to take place on the issue. The sale of Canary Wharf to Morgan Stanley and Simon Glick will be conditional on the completion of the disposals. However, the deal to sell the buildings will still be completed if Morgan Stanley's offer is ultimately unsuccessful. Sphere: Related Content

Land Securities Selling IBM and Nabarro Nathanson HQs in London for Pounds 75m & 90m

Property Week - November 14, 2003

Land Securities is selling two of its London office holdings as it continues to capitalise on the strong market for well-let investments. The UK's largest property company has exchanged contracts to sell the IBM Building on Upper Ground, SE1, to UK & European Investments for Pounds 74.5m. It is also in talks to sell Lacon House on Theobalds Road, WC1, the headquarters of law firm Nabarro Nathanson, to German open-ended fund DB Real Estate for around Pounds 90m. The sales are the latest in a series by LandSecs in the capital. Already this year it has sold Grand Buildings in Trafalgar Square to UBS subsidiary Noriba Bank and Salisbury Square House in the City to Deka.

The IBM Building comprises 216,000 sq ft (20,067 sq m) in a prime position on the South Bank next to the National Theatre. The purchase price reflects a yield of just under 7%. The sale of the property comes four years after LandSecs acquired it in a Pounds 61m sale-and-leaseback with the computer company. IBM is committed until at least 2014, when it has the chance to break the lease.

The Lacon House building was let to Nabarro Nathanson in 1998, when the firm moved from Mayfair Place in the West End in a deal that was seen as crucial to reviving Holborn as an office destination. The deal comes just weeks after DB Real Estate bought Tishman Speyer’s Tower Place scheme next to the Tower of London for £215m.

Sphere: Related Content

British Land Near Pounds 450 Million Sale Leaseback of Debenhams UK Store Portfolio

Property Week - December 4, 2003

City sources said this week that a deal was in the final stages of being completed with Baroness Retail, the new owners of the department store group. The consortium between venture capitalists CVC Capital Partners, Texas Pacific Group, and investment house, Merrill Lynch Global Private Equity agreed to acquire Debenhams for Pounds 1.7bn on 23 October. Following completion of the takeover today, Debenhams shares will be delisted tomorrow. British Land has been in talks with Baroness Retail for weeks over a sale-and-leaseback of up to 16 stores since September. However, both parties have refused to confirm whether a deal will happen. Cushman & Wakefield Healey & Baker is advising Baroness.

Sphere: Related Content

Brixton Sells Two Single Tenant Office Buildings in UK for Pounds 18.25 Million

Property Week - December 8, 2003

Drake House and Swan House, Homestead Road, comprising two office buildings and 245 car spaces, were sold to private property company Zamora at a net initial yield of 7.55%. The properties total 70,322 sq ft (6,533 sq m). Drake House has just been let to BACS on a new 20-year lease, following the departure of Daewoo, the ill-fated car manufacturer, in 2002. Swan House is being let to Comet Group on a 25-year lease. The total annual income amounts to Pounds 1.46m. CBRE acted for Brixton on the sale and Zamora was advised by DTZ. Brixton also recently sold long leasehold interest at Nuffield Way Industrial Estate in Abingdon, Oxfordshire, to ING Property Income Fund for Pounds 17m. Sphere: Related Content

Jamestown Management Acquires $131 Million IBM Office Campus in Atlanta

Jamestown Management
National Real Estate Investor Online Exclusive - Dec 10 2003

A major Atlanta office complex has traded for $131 million, making it Atlanta's biggest office sale of the year. Jamestown Management, a German property syndicator, bought the 864,700 sq. ft. property. The seller was a publicity-shy German billionaire, according to Jamestown's agent Marcus & Millichap. 'The property, 4111 Northside Parkway, was never formally on the market, but when we got wind of the opportunity, Jamestown immediately came to mind as the best qualified buyer,' says Ted Kokernak, a senior agent at Marcus & Millichap. IBM occupies the entire office complex, which consists of two buildings and a multi-level garage. The property was acquired in January 2000 for $120 million, according to Marcus & Millichap. Sphere: Related Content

Realty Income Acquires $135 Million Property Portfolio of 86 Retail Tire Stores

ESCONDIDO, Calif., Dec 1, 2003 (BUSINESS WIRE)

Realty Income Corp. (NYSE:O) announced today that it has provided approximately $135 million in sale-leaseback financing to TBC Corp. (NASDAQ:TBCC) by acquiring 86 retail tire locations under long-term, net-lease agreements. Realty Income acquired the 86 properties under 20-year, triple-net lease agreements. The stores were purchased for an average cost of $1.5 million and average approximately 10,500 in leasable square feet on a typical lot size of 1.2 acres. The properties are generally in desirable retail locations near major retail centers, located on high traffic thoroughfares. In addition, the properties acquired are primarily existing, seasoned, retail tire store locations with profitable operating histories. The 86 stores are located in 15 states including 29 properties in Texas (Dallas, Fort Worth, Houston, San Antonio, Austin, Waco and Beaumont), 11 in Illinois (Chicago MSA), 9 in Pennsylvania, 5 each in Massachusetts, Maryland and Ohio, 4 each in Missouri and Virginia, 3 each in New Jersey and New Hampshire, 2 each in Georgia, North Carolina and Tennessee, and 1 each in Kansas and West Virginia.

Realty Income also disclosed that it plans to hold approximately $110 million of the properties in its core portfolio as long-term investments and will place approximately $25 million of the properties in its Crest Net Lease Inc. subsidiary for future sales. After the sale of the Crest Net Lease properties, the company anticipates that TBC Corp. (TBC) will be its fourth largest tenant and generate approximately 5.8% of its annual revenue. The company also said that on November 18, 2003 it had issued $150 million of 12-year, 5.5% senior unsecured notes to pay down its bank facility and to fund the TBC acquisition. Following this acquisition, Realty Income will have a balance of approximately $60 million on its $250 million unsecured credit facility.

The company further disclosed that TBC used the financing proceeds to partially fund the acquisition of the 225-store, National Tire and Battery (NTB) retail chain from Sears (NYSE: S) for $225 million. TBC is the nation's largest independent tire retailer and, with the closing of this transaction, TBC will grow to over 1,160 locations throughout the United States. The acquired NTB stores will be integrated into TBC's "Tire Kingdom," company-operated retail store network, which will now have over 585 locations. TBC also has over 570 franchised tire and automotive service centers operating under the "Big O Tires" name.

Sphere: Related Content

Lexington Corporate Properties Trust JV Acquires NH Property for $22.7 Million

NEW YORK, Dec 10, 2003 /PRNewswire-FirstCall via Comtex

Lexington Corporate Properties Trust (NYSE: LXP) today announced that an existing joint venture with an institutional investor has acquired an office/manufacturing facility in Durham, New Hampshire from Pitney Bowes (PREFCO) for $22.7 million. The property is a 500,500 square foot mixed-use facility containing office, production, R & D, and warehouse space, originally constructed in 1986 on a 173 acre site. The property was partially renovated and expanded in 2002 and 2003. The property is 100% leased to Heidelberg Web Systems Inc. (Heidelberg) through March 30, 2021. The lease is unconditionally guaranteed by Heidelberg's parent, Heidelberger Druckmaschinen AG. In connection with the acquisition, the joint venture assumed non-recourse first mortgage financing of approximately $19.2 million. The loan bears interest at a fixed rate of 6.73% through March 30, 2011, when the interest rate is reset, and matures on March 30, 2021. Sphere: Related Content

Tuesday, October 21, 2003

GSA Awards $15 Million Build-to-Suit for New DEA Offices in Pittsburgh

Bizjournals.com - October 10, 2003

The General Services Administration has awarded Oxford Development Co. a $15 million contract to construct a 50,000-square-foot building at the Thorn Hill Industrial Park. Sources say the building will be used by the federal Drug Enforcement Administration.

The two-story DEA building will have 24,000 square feet of office space on the upper floor with the ground floor serving as garages, said Kevin Silson, Oxford's director of development. Plans call for construction to begin early next year with completion set for late 2004. GSA has a 15-year lease on the property.

Sphere: Related Content

U.S. Tax Shelters Benefiting Europeans

WASHINGTON - Reuters - October 21, 2003

American taxpayers are subsidizing bridges, subway systems and other infrastructure in Europe and elsewhere through corporate tax shelters that cost the U.S. Treasury billions of dollars, industry experts told a Senate panel on Tuesday.

Testifying before the Senate Finance Committee from behind a screen, a former leasing industry executive described complex transactions that involve companies paying lump sums to foreign towns and cities to lease bridges, dams, subways and other infrastructure. They then lease the property back to the town or city for the sole purpose of cutting their U.S. tax bill by depreciating the asset. No lease payments are ever made and the town or city is in no danger of losing control of the subway or other asset, he explained. "The only risk in the overall transaction is whether the IRS will attack the depreciation deductions of the U.S. investors," he said.

With his voice distorted, the former leasing industry executive described by the committee only as "Mr. Janet," said the transactions are arranged by some of the biggest financial advisors in Europe and the United States. Participants include major U.S. banks and Fortune 500 companies, he said. "This scheme is so pervasive that much of the old and new infrastructure throughout Europe has been leased to, and leased back from, American corporations," he said. He told the panel that the tax shelter scheme has been so successful that U.S. cities are now doing the same, with the subway systems of Boston, Chicago and Washington having been leased back to U.S. corporations. He said he had reason to believe that New York and Chicago water authorities were about to lease the waterlines under their streets.

Senate Finance Committee Chairman Charles Grassley is pushing to clamp down on abusive tax shelters. A measure inserted into a business tax bill the committee passed earlier this month would discourage firms from engaging in transactions that have no business purpose other than to avoid taxes. "I say to the hucksters (of abusive tax shelters) it is time to find an honest living," said Grassley, an Iowa Republican. Sen. Max Baucus of Montana, the top Democrat on the committee, said abusive tax shelters cost the federal treasury about $14 billion to $18 billion a year. Sphere: Related Content

O'Charleys Completes $50 Million Sale and Leaseback of 23 Restaurants

NASHVILLE, TN - BUSINESS WIRE - October 21, 2003

O'Charley's Inc., a leading casual dining restaurant company, today announced the completion of a $50 million sale and leaseback transaction involving 23 of its O'Charley's restaurants for $50 million. The terms of the agreement provide for an initial 20-year term with renewal options for up to an additional 20 years and provide for minimum average annual lease payments of $4.2 million for the initial 20-year term.

The Company has used the net proceeds from this transaction to pay down amounts outstanding under its senior credit facility. The Company intends to enter into additional sale and leaseback transactions pursuant to which the Company may sell and lease back up to 20 O'Charley's restaurants, which the Company expects will generate gross proceeds of up to approximately $35 million.

O'Charley's Inc. is one of the leading casual dining restaurant operators in the Southeast and Midwest operating 206 O'Charley's restaurants in 16 states. Sphere: Related Content

Monday, October 20, 2003

Huffman Koos Offering Sale-Leaseback of Two Retail Locations

GREAT NECK, NY - MARKET WIRE - October 20,2003

Huffman Koos has retained Keen Realty, LLC to market for long term sale-leaseback two of the company's best retail properties located in East Brunswick and Livingston, NJ. Huffman Koos has been in business for over 86 years and operates 20 furniture showrooms located in NJ, NY and CT featuring quality, value priced brand name furniture.

The two prime retail properties include a 49,627 sf building on 2.75 acres located at 651 State Highway 18 in East Brunswick, NJ, and a 56,738 sf building on 3.59 acres located at Route 10 Circle in Livingston, NJ.

Sphere: Related Content

Friday, October 17, 2003

Realty Income Pursuing $135 million Single Tenant Property Portfolio

ESCONDIDO, CA - October 16, 2003 - BUSINESS WIRE

Realty Income Corporation today announced that it anticipates substantially exceeding its previously planned target of approximately $150 million in new property acquisition activity during 2003.

The Company announced that, in addition to its planned $95 million acquisition of the Golden Gallion portfolio, it is negotiating the acquisition of an additional $135 million portfolio of properties in an industry in which the Company has previously invested. Realty Income is also actively evaluating other acquisition opportunities and one or more of these acquisitions may close during the fourth quarter of 2003.

The Company further stated that it anticipates that the majority of properties that may be acquired during the balance of 2003 will be held for long-term investment within Realty Income's real estate portfolio and the remainder of the properties will be allocated to Crest Net Lease for subsequent sale. Sphere: Related Content

The Pantry Completes $94.5 Million Long Term Lease Financing of 114 Convenience Stores

ESCONDIDO, CA - BUSINESS WIRE - October 17, 2003

Realty Income Corp. announced today that it has provided $94.5 million in sale-leaseback financing to The Pantry Inc. by acquiring 114 convenience store properties under 20-year, triple-net lease agreements.

The stores average 2,700 leasable sf and are situated on a lot size of 1.14 acres. Each location has multi-pump gasoline dispensers and are seasoned stores with an average 14-year operating history. The average purchase price for each property was $829,000. Realty Income will announce its blended lease rate and lease terms on a cumulative basis in the company's quarterly press release on operations.

The Pantry Inc. will use the financing proceeds to partially fund their previously disclosed acquisition of Golden Gallon Stores from Ahold, USA. The properties are existing, high volume, profitable convenience stores operating under the "Golden Gallon" brand name and are located in Tennessee and Georgia. Golden Gallon was founded in 1959 and currently operates 138 convenience stores.

The Pantry Inc. is the leading convenience store operator in the Southeastern United States. Upon completion of the Golden Gallon acquisition, The Pantry's market presence will significantly increase to approximately 1,400 stores in ten Southeastern states. Sphere: Related Content

Thursday, October 16, 2003

CarrAmerica Acquires Cell Genesys HQ in San Francisco, CA

WASHINGTON - October 15, 2003 - PRNewswire-FirstCall

CarrAmerica Realty Corporation today announced that it has acquired 500 Forbes Boulevard, a two-story, 155,685 square foot office and biotech building located in South San Francisco, CA, for $51 million ($327/sf), with an expected year one yield on the investment of 14.7%. The building is currently 100% leased to Cell Genesys, Inc. under a long-term lease. Cell Genesys researches, develops and commercializes new therapies for the treatment of cancer.

The property was built in 2003 and features state-of-the-art lab and office construction. It is proximate to research institutions such as Stanford University; the University of California, San Francisco; and the University of California, Berkeley; and is adjacent to the biotech firm Genentech. Other nearby amenities include hotels, public transportation (including CalTrain and BART), a marina and the San Francisco International Airport. Sphere: Related Content

Wednesday, October 15, 2003

NASD Sanctions Wells For Non-Cash Compensation Rule Violations

NASD Website - WASHINGTON, DC, October 13, 2003

NASD announced today that it has sanctioned Wells Investment Services, Inc., a sponsor of real estate
investment trusts (REITs), for rewarding broker/dealer representatives who sell their REITs with lavish entertainment and travel perquisites, in violation of NASD rules. NASD censured Wells Investment and its President, Leo Wells, and fined them $150,000. NASD also suspended Leo Wells from acting in a principal capacity for one year.

NASD prohibits REIT sponsors from rewarding broker/dealer representatives from other firms with entertainment, gifts or other non-cash compensation. These practices create point-of-sale incentives that may undermine a representative's ability to objectively recommend suitable investments to customers.

In 2001 and 2002, Wells Investment sponsored conferences in Scottsdale, Arizona, and Amelia Island, Florida, which were attended by broker/dealer representatives from other firms who sold its REIT products. Although Wells Investment represented to NASD that these conferences were "strictly educational," they actually constituted lavish affairs that did not meet the standards of NASD rules. For example, Wells Investment provided broker/dealer representatives with a Friday night "sock hop," a "beach bash," and dinner at a Civil War fort with costumed Civil War heroes, fireworks, fife and drum players, skydivers, and a cannon reenactment. Wells Investment also invited the representatives' guests to many of these events, and paid for the guests' food, transportation, lodging and golf fees. Wells Investment provided less than 13 hours of training and education during the three full days of each conference.

In settling this matter, Wells Investment and Wells neither admitted nor denied the allegations, but consented to the entry of findings and imposition of sanctions. Sphere: Related Content

Thursday, October 09, 2003

Duke Energy Seeks Sale Leaseback of Charlotte, NC Offices

Real Estate Alert reports that Duke Energy is seeking to sell and lease back two office buildings in Charlotte, NC valued at $70 million. A 2,200 unit parking garage is included in the sale. The two buildings total 377,000 sf and consist of a 260,000 sf office/flex building and a 117,000 sf office building. Duke will sign a 20 year lease on both buildings at a triple net rent of $13 and $12 per sf respectively. Duke hopes to close by year-end. Staubach has the listing. Sphere: Related Content

Marriott HQ Near Washington, DC Selling For $80 Million

Real Estate Alert reports that Freemont Group has agreed to sell Marriott International's 288,000 sf headquarters at Two Washingtonian Center in Gaithersburg, MD to GLL Real Estate Partners. The Marriott lease for the entire building runs through 2015 at triple net rents of $21 per sf. The offering price would provide the buyer a 7.5% initial annual return. The six story building was designed with two wings, an atrium and a 1,150 car garage on a 5-acre site. The first wing and atrium totalling 155,000 sf were completed in spring 2002. The second wing is scheduled for completion by next summer. Hewlett Packard subleases 71,000 sf. Sphere: Related Content

AON Offices Near Chicago For Sale at $85 Million

Real Estate Alert reports that Prudential Real Estate Investors (PREI) is offering a 416,000 sf office building in Glenview, IL that is net leased to AON Corp through 2017. The 27 year old building was fully renovated by Blackstone in 2001 and purchased by PREI on behalf of a foreign-client. The offering price would provide the buyer a 7.1% initial annual return but rents escalate at 3.5% per year. Sphere: Related Content

Charles Schwab Campus Near San Francisco on Market for $180 Million

Real Estate Alert reports that Hines is marketing a recently completed office campus in suburban San Francisco that is fully leased to Charles Schwab. The 596,000 sf Pleasanton Corporate Commons is valued at $180 million, or about $300/sf, giving a buyer an initial annual yield of approximately 8%.

Schwab has two long-term leases on the property at an average rent of roughly $36/sf. Schwab occupies 60,000 sf and subleases 118,000 sf to E-Loan. Schwab is currently trying to sublease the remaining space at an asking rent of $22/sf. The vacancy level in the market is about 22% including sublease space. Sphere: Related Content

Wednesday, October 08, 2003

Zions Bancorp Signs Long Term Lease for Salt Lake City HQ

Deseret Morning News - October 7, 2003

Zions Bancorp.'s 18-story downtown Salt Lake headquarters is about to get a makeover. Plans call for refacing the building with a stone-and-glass facade. The interior also will be reworked with structural upgrades, including seismic reinforcement. Zions Bancorp. has committed to a long-term lease of the entire building and will expand its occupancy from 60 percent to 100 percent.

Built in 1965, the former Kennecott Building goes by the Gateway Tower East Building moniker now, but that will switch to the Zions Bank Building when construction is completed. Construction is expected to last about 18 months. Zions Bank, which operates more than 400 full-service banking offices in Utah and seven other Western states, will continue to occupy the building during the work. Sphere: Related Content

Tuesday, October 07, 2003

Couche-Tard Buys Circle K For $830 Million - Sale & Leasebacks Planned

National Post - October 7, 2003

Alimentation Couche-Tard Inc. has announced an $830 million deal to buy more than 2,000 Circle K convenience stores in 16 states. The agreement to purchase the retail outlet and gas chain from ConocoPhillips Co. will vault Couche-Tard to the No. 4 spot from No. 7 in North American convenience store rankings. Over 75 percent of the company's sales will be in the United States. Couche-Tard is Canada's largest convenience store operator, with 1,800 locations.

The Circle K outlets acquired include 1,663 corporate and about 350 franchised or licensed stores concentrated in the sun belt states, with 523 stores in Arizona, 360 in Florida, 158 in California and 151 in Louisiana. Couche-Tard's existing U.S. stores, under the Mac's, Handy Andy and Dairy Mart banners, are concentrated in the Midwest. The Circle K deal would boost its total number of stores in North America to 4,630 from 2,575.

Couche-Tard will pay for the deal with a new C$1.2-billion credit facility and a private placement of 13.5-million subordinated voting class B shares for proceeds of C$223-million. The company plans to immediately cut debt by C$300-million by selling 300 of its stores and leasing them back.
Sphere: Related Content

Monday, October 06, 2003

Freshfields HQ in London Sells for £99.2 Million

Freemans News - October 6, 2003

DB Real Estate has purchased Northcliffe House, Tudor Street, London EC4, from an affiliate of US financial services provider TIAA-CREF, and Clerical Medical. The price of £99.2m reflects a net initial yield of 6.4%.

Completed in 2001, the 191,000 sq ft Northcliffe House was developed by Hilstone and funded by TIAA-CREF and Clerical Medical. Northcliffe House is currently let to Freshfields Bruckhaus Deringer at £37.64 per sq ft under leases until August 2021, with a break in 2018. The tenure is long leasehold from the Folkstone Estate for 151 years, at a rental gearing of 5%. Sphere: Related Content

Friday, October 03, 2003

Be Afraid, Be Very Afraid!

The Economic Times - SEPTEMBER 26, 2003

Business process outsourcing is a hot topic in real estate circles lately. Office jobs being shipped overseas to employees who work for a fraction of the wages of their US counterparts. A recent article in Forbes (Giant Sucking Sound) discussed the trend in light of a decision by EDS to lay off at least 2,750 higher-paid workers, mostly in the U.S. and Europe. But most professionals have not been concerned because the trend did not directly affect them. Their industry, or their highly skilled professional job was not at risk. Well, things have changed.

A new company, Global Realty Outsourcing, has already hired 350 real estate staff in India. Over 50 per cent are Chartered Accountants or MBAs. The firm has anounced that they will hire 1,000 more by June 2004. This total includes more highly skilled professionals. The services to be provided range from low level financial analysis such as developing discounted cash flow models, title support and mortgage processing, to higher-level services such as loan underwriting.

And who is behind this company? The company is funded by Capital Trust (Sam Zell), CDC Capital Partners, Citigroup Investments and Wachovia Securities. Need I say more?

Ocwen Financial Corp. has hired over 800 workers in India over the past two years while their headquarters staff was cut from a high of 1,000 to less than 500 today. The firm was recently awarded a $95 million contract to manage the U.S. Department of Veterans Affairs' foreclosed homes. A furor erupted when lawmakers heard work on the contract might be handled by the newly hired workers in India.

Another firm, OfficeTiger, founded by two youthful American partners Jo Sigelman and Randy Altschuler, has targeted the major US investment banks for highly skilled investment banking outsource assignments. A third of it's 1,000 staff have Masters degrees and average age 26. Requests are typically processed at a rate of $15 an hour rather than $50-$60 here. The company's staff operate in three shifts around the clock so that bankers, lawyers and their staff who no longer have to work late, running up fees, overtime and taxi costs.

Companies like Morgan Stanley, JP Morgan Chase and Moody's Investor Service are already contracting out research tasks or setting up their own support centers in India. All are wary of revealing it for fear of alienating clients, the public and their own staff in the US. But the pace of offshore outsourcing is increasing as evidenced by a quick review of dozens of recent hiring announcement published by the Indian press and listed at BPOIndia.org. Brings new meaning to the term "jobless recovery", jobless in the US only.

An article in PropertyWeek, notes that 23 million sf of speculative office space is being built on the outskirts of Delhi. In fact, it was speculative space, but much of it is now prelet. Around 3 million sf of demand from London occupiers now exists in India. Up to 150,000 existing and future UK office jobs could end up in India within five years, equating to 15 million sf of office space according to the article.

The implications for the US office market are far more dire. A Deloitte Research forecast report released in April reported that the world's top 100 financial companies will move 1 million mainly back-office and technology-related jobs to India by 2008. Using a conservative per sf/per employee ratio of 220 sf, that translates to a demand drop of 220 million sf in the US office sector over the next 5 years solely from the move of jobs overseas.

The silver lining to the dark cloud of offshore job movement is that companies are cutting costs and becomming more competetive. But this may be small consolation to investors in the U.S. office sector, particularly those with holdings in secondary and tertiary markets and in large back-office-type real estate like call centers. Sphere: Related Content

Thursday, October 02, 2003

Lexington REIT Forms Net Lease Investment JV With Clarion Fund

PRNewswire - NEW YORK - October 2, 2003

Lexington Corporate Properties Trust ( NYSE:LXP), a real estate investment trust, today announced that it has formed a Joint Venture program with Clarion Lion Properties Fund, LLC to invest in single-tenant net-leased real estate throughout the United States.

Under the terms of the Joint Venture, Lexington and the Lion Fund plan to contribute $30 million and $70 million, respectively, to the Joint Venture. The Joint Venture will acquire single tenant office, industrial and retail properties and intends to acquire $250 million in real estate. The Joint Venture is Lexington's third such partnership with a major institutional investor and will enable Lexington to expand its operating platform, grow its asset management business and broaden its access to capital. Sphere: Related Content

German Fund Acquires Milan Office Complex for $234M

GlobeSt.com - October 1, 2003

In one of the largest sales in Europe this year, the German open fund Deutsche Gesellschaft für Immobilienfonds (DEGI) has paid USD$234 million (200 million Euro) for Bodio Center, a 700,000-sf (65,000-sm) office development in the central Milan district of Bovisa.

The three-building, 384,000-sf first phase of the project, completed last year, is fully leased, with one building leased by the insurance and financial services firm Marsh McLennan, and the two others leased by Unicredito Italiano SpA, one of Italy's largest banks.

Bodio Center is one of first master-planned, urban business parks. The seller was the developer, Doughty Hanson & Co Real Estate of London. It acquired the Bodio Center property, a former Alcatel office and production facility, in December 2000 and proceeded to turn the site into a business center with underground parking for 700 cars.The second phase is under construction and slated for completion for January 2004. Sphere: Related Content

Wednesday, October 01, 2003

Pierre & Vacances Closes E440 Million Sale & Leaseback of 8 Center Parc Villages

Pierre & Vacances Web Site - September 29, 2003

On September 26th 2003, Pierre & Vacances acquired the stake held by MidOcean in Center Parcs Continental Europe, becoming the exclusive owner of the entity. The Group thus reinforces its European leadership in leisure residences with a turnover of E1.1 billion.

Prior to the deal, and in accordance with the Group's policy of not owning the freehold of the property assets under its management, Center Parcs Continental Europe sold the eight Center Parcs villages on which it owned the freehold.

The sale of 7 villages was finalised on September 26th 2003 with Nomura International plc for a total amount of E440 million (E415 million net of costs and tax). In addition, a consortium led by the Dutch company Zeeland Investments Beheer agreed to acquire another village in the Netherlands for a price of E90 million (E80 million net of commissions and tax). This sale should be done by the end of October 2003. Sphere: Related Content

Canary Wharf Enters £753.5 Million Finance Lease With Barclays

Freeman News - LONDON (AFX) - September 30, 2003

Canary Wharf Group PLC said it has entered into a finance lease transaction on 1 Churchill Place to accelerate the refinancing of the building, with a unit of Barclays Bank PLC. The transaction is expected to generate approximately 299 mln stg in additional liquidity for the group, which will be used for general corporate purposes.

The gross amount of the financing is 753.5 mln stg cash, of which 743.5 mln was received today and 10 mln payable on practical completion. On completion and the expiry of the 5 month rent free period, an occupational lease rent of 41 stg per sq ft will be payable by Barclays Bank.

The property is presently under construction and scheduled for a June 2004 completion. The bank was initially expected to occupy 60,385 sq m (650,000 sq ft), with options on the remaining space.
Sphere: Related Content

Sunrise Senior Living Completes $252 Million Sale/Manage Back Transaction

Sunrise Senior Living Web Site - September 30, 2003

Sunrise Senior Living, Inc. (NYSE: SRZ), has completed sale/long-term manage back transactions for 21 consolidated communities valued at approximately $252 million.

The closings occurred in two separate transactions including the sale/long-term manage back of a 100 percent interest in 16 communities for $158 million to CNL Retirement Properties, Inc ('CNL'). In a separate transaction, Sunrise completed the sale/long-term manage back of five consolidated senior living communities for $94 million to investment entities advised by Macquarie Capital Partners, LLC, which acquired a 90 percent interest in the venture with Sunrise retaining a 10 percent interest. Sunrise will continue to operate all 21 communities under long-term management agreements.

Sunrise Senior Living is the nation's largest provider of senior living services with over 360 senior living communities either open or under construction in the United States, United Kingdom and Canada. Sphere: Related Content

Office Market On The Road To Recovery?

PRNewswire-FirstCall - October 1, 2003

Myth or reality: Commercial office rental rates have hit bottom in most markets? Answer: MYTH. A new study by PNC Real Estate Finance and Grubb & Ellis Company finds that rents continue to fall, but that the rate of decline is slowing. It clearly remains a tenants' market, and will remain so well into 2004, according to the report.

Other findings reported by PNC Real Estate Finance and Grubb & Ellis in "Myth or Reality: No Worse, No Better, No Hope? Catching Up With the Office Market," include:

- Myth or reality: The market faces a problem of under-demand, not
oversupply. REALITY, but does it matter? The bottom line is that,
nationally, vacant space has increased by 245 million square feet over
the past 2 1/2 years -- the equivalent of emptying every office
building in Chicago and then some.

- Myth or reality: Tenants are taking advantage of low rates to upgrade
their space. MYTH, so far. Tenants have remained fiscally
conservative and the gap between "A" and "B" rents has not narrowed to
the point to encourage mass migration.

- Myth or reality: Lease terms are lengthening as tenants use their
bargaining power to lock in longer terms at lower rates. Myth.
Although great deals are available, tenants remain opposed to signing
long-term leases at a time when the direction and stability of the
economy is still questionable.

- Myth or reality: Smaller tenants are more active than their larger
counterparts. REALITY. The average lease size has declined by 40
percent over the past three years. Large companies are still more
likely to consolidate or downsize space requirements, while smaller
tenants are more agile, acting as leaders in recovery.

While an economic recovery may be underway, it remains a jobless recovery. Getting back to a 10 percent vacancy rate (from today's 17.6 percent) will require absorption of about 250 million square feet of office space. A normal annual absorption pace is about 50-60 million square feet. Several quarters of job growth will be required to determine how the office market will respond.

A complete version of the office market report is available online at either:
http://www.pncrealestatefinance.com/REMarketResearch.htm or

Sphere: Related Content

Potomac Electric Sells HQ in Washington DC for $151 Million

Pepco Holdings, Inc. Web Site - September 30, 2003

Potomac Capital Investment Corporation, a wholly owned subsidiary of Pepco Holdings, Inc. (PHI), (NYSE: POM), has sold its ten-story, 360,000 square-foot headquarters office building in downtown Washington, D.C. to Wachovia Corporation for $151 million. The sale which closed on September 30, 2003 was handled by Cassidy and Pinkard.

Known as Edison Place, the building is located at 701 Ninth Street N.W., in the highly desirable East End section, and has served as the corporate headquarters of PHI and its utility subsidiary Pepco since 2001. The current, long-term Pepco lease in the building will remain in place as part of the terms of the sale. PHI's ongoing lease of the building demonstrates its continued commitment to remaining in the District of Columbia.

Pepco Holdings' principal operating utilities, Pepco and Conectiv, deliver 50,000 gigawatt-hours of power to more than 1.8 million customers in the District of Columbia, Delaware, Maryland, New Jersey and Virginia. Sphere: Related Content

Tuesday, September 30, 2003

Manulife Ponders Sale Leaseback of U.S. HQ in South Boston's Seaport

BostonHerald.com - September 30, 2003

One of Boston's newest office high-rises could wind up on the block in the aftermath of Manulife Financial Corp.'s blockbuster acquisition of hometown insurance giant John Hancock Financial Services, real estate experts say.

The $10.4 billion merger of the two financial and insurance heavyweights will result in the pooling of both companies' substantial Hub real estate holdings. While Hancock has a long-term lease for a large block of its signature tower in the Back Bay, the Toronto-based Manulife is poised to open a glitzy U.S. headquarters next year in South Boston's Seaport.

Real estate experts expect the combined company to look at its property options in the coming months, including a possible sale and leaseback of Manulife's 470,000-square-foot building near the World Trade Center. Such a move, if timed to match an upsurge in the economy and real estate market, could see Manulife's glass-and-steel Seaport office complex fetch between $164 million to $188 million. Sphere: Related Content

Midwest Express Enters Sale/Leaseback of HQ

MILWAUKEE, WI - September 30, 2003 - PRNewswire-FirstCall

Midwest Express Holdings, Inc. (NYSE: MEH) today said it has reached a tentative agreement to complete a sale/leaseback of its Oak Creek, Wisconsin headquarters facility. The transaction, which is expected to close in mid-October, would provide the company with net proceeds of approximately $9.5 million after payment of the existing mortgage and transaction expenses.

The sale/leaseback transaction, combined with the sale of convertible senior secured notes and common stock also announced today, would provide the airline holding company with approximately $40 million in new liquidity. These are the final major components of the company's restructuring plan -- which included changes to its product offering; new agreements with its unions and aircraft lessors and lenders; route and schedule changes; and other cost-reduction efforts. Midwest Airlines features nonstop jet service to major destinations throughout the United States. Sphere: Related Content

Slew of Single Tenant Propeties on Market In Washington, DC

Cassidy & Pinkard Web Site

The Collins brothers at Cassidy & Pinkard in DC have been on a tear recently as the DC market continues to sizzle. The duo has three desirable single tenant offerings in various states of negotiation at the present time including:

6101 Stevenson Avenue, a Class A, 73,669 square foot office building located in the I-395 Corridor in the City of Alexandria, Virginia. Surface and garage parking for tenants and visitors. The building is 100% leased to Computer Sciences Corporation (CSC)/DynCorp, an “A” rated credit tenant, through February 2012. CSC/Dyncorp has a 12-yr NNN lease term escalating at 3% annually, offering long-term stable cash flow.

Edison Place is a 10-story trophy quality office building located at 701 9th Street, Washington, DC. This Class A, 363,918 square foot building is prominently sited one block west of MCI Center and across the street from The National Portrait Gallery. The property is 100%, NNN leased to PHI Service Company (a subsidiary of Pepco Holdings, Inc). PHI Service Company has master leased the building for a 25-year term and Pepco Holdings, Inc. is the guarantor. Building amenities include a rooftop terrace, which provides spectacular views of the Washington Monument and US Capitol, and a four-level underground parking garage. Edison Place presents investors the opportunity to purchase a trophy quality asset that offers credit tenancy, prime location and escalating cash flow.

Avion Midrise III & IV are two freestanding, newly-constructed twin office buildings totaling 143,011 square feet, which are located within the exclusive Avion Business Park in Chantilly, Virginia. Both buildings are three-stories and offer large floorplate sizes of 23,685 square feet, which are designed to serve single and multi-tenanted users. The buildings are 100% leased to two credit tenants –GSA-Drug Enforcement Agency and Lockheed Martin. Amenities within the park include a fitness facility, jogging trails and a café for tenants to enjoy. Sphere: Related Content

Investors Turn Attention To Net-Leased Properties

The Wall Street Journal - RealEstateJournal - September 30, 2003

Property investors are increasingly eager to get their hands on real estate they can pretty much ignore.
Demand is strong for single-tenant net-lease properties, which are office buildings, warehouses or retail properties occupied by one tenant that is responsible for expenses, including taxes, insurance and maintenance, and almost everything else.

Investors find net-lease properties desirable because they don't require hands-on, day-to-day management. What's more, the tenant usually holds a long-term lease -- sometimes 30 years -- which gives investors the impression that income can be counted on for years."

Individuals can invest in net-lease properties by either buying a property on one's own or forming a partnership with one or more investors and purchasing it jointly. A third option is buying a fractional interest in the property through what is known as a tenant-in-common program. That option allows investors to get in on more costly properties. A tenant-in-common program is a form of 1031 exchanges, transactions in which an investor sells a property and replaces it with a like-kind property to defer capital-gains taxes.

There are two basic types of single-tenant net-lease properties. Triple net-lease properties are ones in which the tenant -- the lessee -- pays rent to the owner, as well as all taxes, insurance and maintenance expenses. Double net-lease properties are those in which the tenant pays rent to the landlord, as well as all taxes and insurance expenses that arise from the use of the property. But the owner pays maintenance expenses.

Among the most common net-lease properties: auto-parts stores, video stores, drugstores and restaurants. Auto-parts and video stores generally cost between $600,000 and $1.5 million, while restaurants can range from $750,000 to $2.25 million, according to Bernard Haddigan, national director of Marcus & Millichap Real Estate Investment Brokerage Co.'s national retail group. Drugstores can cost between $3 million and $7 million, says Mr. Haddigan, who is based in the Atlanta office of the Encino, Calif., firm. Properties with tenants that have good credit ratings have prices toward the higher ends of those ranges, he says.

Investors should lean toward general-purpose buildings, as opposed to special-purpose buildings, brokers say. General-purpose buildings can accommodate all manner of tenants so that, in the event a tenant leaves, a new tenant can move right in without having to reconfigure the entire building. Sphere: Related Content

Sale of Charles Schwab Regional HQ Closes for $194 million

CRANFORD, N.J. - BUSINESS WIRE - September 29, 2003

Mack-Cali Realty Corporation (NYSE: CLI) today announced that through a joint venture partnership it has sold Harborside Financial Center Plaza 10, a 577,575 square-foot class A office property in Jersey City, New Jersey, for $194 million. The 19-story building, which is fully leased to Charles Schwab & Co., was sold to an institutional real estate buyer.

Mack-Cali will continue to manage the property, which is part of its Harborside Financial Center complex on the Jersey City waterfront. Mack-Cali received net proceeds of approximately $165 million from the sale, which it intends to use primarily to repay outstanding borrowings under its revolving credit facility. Harborside Plaza 10 was owned by a joint venture between Mack-Cali and Columbia Development.

Mack-Cali will remain a leading owner and operator of office properties on the Jersey City waterfront. After the sale, Mack-Cali continues to own a 100 percent interest in five office buildings totaling more than 3 million square feet of class A office space at Harborside Financial Center.

The joint venture continues to own a land site adjacent to Harborside Plaza 10 that can accommodate the development of over 1.2 million square feet of office space. In addition, Mack-Cali's wholly-owned land at Harborside can accommodate the development of 3.1 million square feet of office space. Sphere: Related Content

Monday, September 29, 2003

Deutsche Bank Nearing Massive Sale & Leaseback of European Property Portfolio

Financial Times - September 29, 2003

Deutsche Bank is nearing an agreement to sell €1bn ($1.14bn) of its European property portfolio to Blackstone, the private equity group, in what would be one of the biggest property divestitures by a German company.

According to people close to the deal, Blackstone, which last year raised €800m to invest in western Europe, would buy about 50 Deutsche offices and branches in cities including Barcelona, Brussels, Milan, Lisbon, Luxembourg, Düsseldorf, Munich and Zurich. About two-thirds of the properties are in Germany.

The disposal is part of plans by Josef Ackermann, chief executive of Deutsche, to free up capital from non-core activities."

The deal is expected to include a new building currently under construction in Frankfurt, Deutsche Bank's new investment banking headquarters in Frankfurt, the old Deutsche Bank banking hall in Milan and a regional stock exchange building in Germany.

The bank would continue to occupy most of the properties on long leases, while the rest would be on shorter leases with the understanding that Deutsche would probably vacate them when the leases expired.

Terms of the deal are understood to have been agreed, and Deutsche Bank's supervisory board is expected to vote on the sale in the next few weeks. Deutsche declined to comment and Blackstone could not be reached. Sphere: Related Content

Scandinavian Airlines Completes Sale Leaseback of Copenhagen Offices

Scandinavian Airlines Web Site - September 29, 2003

The SAS Group has in connection with the latest quarterly result informed about a program of release of capital including office properties.

The SAS Group has signed an agreement with the Danish company Keops to sell five office properties in Copenhagen. The transaction will release capital of approximately MSEK 1,000 (approx $130 mm) and will reduce net debt by a similar amount. The transaction will provide a gain on sales in excess of MSEK 500. The SAS Group has also signed a lease agreement of between 10 an 15 years and will also in the future use the properties involved. The costs for the leaseback are neutral compared with depreciations and interest cost of today.

The transaction is also part of the SAS Group's focus on core business and enhances flexibility for the SAS Group's future need for office properties. The transaction is pending full completion of all conditions in the agreement and relevant government approvals. Sphere: Related Content

Friday, September 26, 2003

Office Market Rebound Years Away?

Dow Jones Newswires - RealEstateJournal Property Report - September 26, 2003

It could be another four, five -- even six years before the office real-estate market rebounds, according to Nicholas Chermayeff, managing principal at Barrow Street Capital LLC, a real-estate investment firm.

Speaking at an Information Management Network real-estate investing conference in New York recently, Mr. Chermayeff said rents and occupancies have been dropping like stones -- with New York City being among the hardest hit. The recent sale of the prestigious General Motors building in Manhattan to Macklowe Properties for about $1.4 billion, or $800 a square foot, was 'completely insane,' he said. 'I can't imagine anyone paying that price in New York' when vacancies are rising, the economy is getting worse, tax rates are going up, property taxes are on the rise, and the threat of terrorism lingers in the air, he said." "I think these trophy buildings that are trading at these lofty prices could correct 25% to 40% within five years," he said.

"We're not investing at all in New York," Mr. Chermayeff said. In fact, "we're not investing in office anywhere in the country right now because we're very bearish on the office fundamentals. We're selling all of our office buildings," he said. "In our view, it's a dangerous and treacherous time" to be buying.

Sphere: Related Content

£350 Million Sale Leaseback of Debenhams Portfolio Likely

Property Week - 26 September 2003:

British Land is in talks with venture capitalists CVC Capital Partners and Texas Pacific Group over buying Debenhams' freehold property if their offer for the group is successful. CVC and Texas Pacific made a recommended cash offer for Debenhams on 12 September through their bid vehicle, Baroness Retail.

It emerged this week that the organisations have held early stage discussions about a possible sale-and-leaseback of £350m of freeholds to fund a bid for the department store. The talks, which have been kept secret until now, represent the first sign that CVC and Texas Pacific are considering raising part of the £1.66bn offered to buy the chain on the back of its property.

A consortium led by Permira, the venture capitalist whose £1.54bn bid for Debenhams was trumped by Baroness Retail, had agreed to sell the properties to Legal & General and Land Securities. Permira may launch a counterbid. It is also possible that L&G and LandSecs could switch to Baroness if Permira's bid proved unsuccessful.

Sphere: Related Content

Thursday, September 25, 2003

CB Richard Ellis Investors Patents $73 Million Tenancy-in-Common Structure

LOS ANGELES, CA - September 25, 2003 - PRNewswire

CB Richard Ellis Investors has announced that it has successfully completed its first Tenancy-in-Common ('TIC') offering known as the 1031FORT(R). Valued at $73.5 million and primarily targeting 1031 exchangers, this is one of the largest offerings of Tenancy-in-Common real estate interests to date, and CB Richard Ellis Investors is planning to announce the availability of additional Tenancy-in-Common offerings. The success of these new offerings is apparent as many competitors have now announced similar Tenancy-in-Common products.

CBRE Investors was recently awarded U.S. Patent No. 6,292,788, entitled Methods and Investment Instruments For Performing Tax-Deferred Real Estate Exchanges. The patent covers a new approach to creating a Tenancy-in-Common real estate interest that can be used in a section 1031 real estate exchange. CBRE Investors has also applied for additional patents in this same area. Industry watch dogs and the investment banking community are closely monitoring the industry to see how CBRE Investors moves forward armed with this patent.

CBRE Investors has retained the law firm of Snell & Wilmer as patent, licensing and litigation counsel, a move which brings substantial firepower to future patent enforcement actions. Snell & Wilmer also represents CBRE Investors in tax matters as they pertain to the 1031FORT(R) product. Sphere: Related Content

ECM Fund to Invest $150 Million in Walgreen's Net Leases

CHICAGO - September 23, 2003 - PRNewswire

Equity Capital Management (ECM), an investment firm specializing in net leased commercial real estate, has raised a discretionary equity real estate fund capitalized to invest $150 million in real estate assets leased to Walgreen & Co. under long-term net leases.

Investors in ECM Income & Growth Fund, LLC include a broad spectrum of money managers and high net worth individuals from St. Louis and Chicago. Institutional partners include Bank of America, MONY Real Estate, Transwestern Investment Company, and Wachovia Securities.

The firm's principals, Shelby E. L. Pruett, a Chicago based institutional investor and fund manager, and James G. Koman, a St. Louis based real estate developer and entrepreneur, formed ECM for the purpose of sponsoring private equity investments by the principals and third-party investors. ECM's funds acquire commercial properties leased to national companies under long-term net leases where the tenant is responsible for all property costs such as taxes, maintenance and insurance. Properties generate current income during the holding period and are eventually sold with the objective of producing long- term capital gains.

'The net lease market is a proven and growing market that is attracting significant institutional attention,' said Pruett. 'We believe the demand for net leased properties will continue to grow and be enhanced as the economy improves and national companies are better able to capitalize on their credit rating. We are looking very seriously at a range of portfolio opportunities and are in discussions with a number of developers. We have the advantage of being able to move quickly, which is attractive to owners."

ECM's net lease strategy will help minimize most of the operating risk associated with property ownership and enable the fund to bridge real estate and economic cycles due to the long-term nature of the leases and investment grade credit rating of Walgreens.

As of September 2003, the Income and Growth fund closed to new commitments and began implementing its investment program. Approximately $45 million in assets have been acquired or are under contract to date. The investments are located in prime locations in either high-growth or established suburban areas. These areas have been targeted based on population density, traffic volumes, and established retail corridors.

While the Income and Growth fund is closed, ECM will launch a follow-on investment fund that, in addition to acquiring real estate assets net leased to Walgreens, will acquire net leased assets of a broad base of national tenants.

Sphere: Related Content

Bank of America Extends 98 Branch Sale Leaseback

JENKINTOWN, PA - September 25, 2003 - PRNewswire/FirstCall

American Financial Realty Trust (NYSE: AFR) has acquired from Prefco III Limited Partnership (Pitney Bowes, Inc.) 98 bank branches containing approximately 482,000 square feet. The purchase price for the portfolio was approximately $90.0 million. The 2004 contractual rent under the lease is approximately $7.5 million.

Bank of America, N.A. will lease 74 of the properties for 20 years on a triple-net lease basis. Among the other properties, seven will be leased to Bank of America, N.A. for varying terms, 14 are subleased with leases expiring in December 2008, and the remaining three are vacant. Bank of America is AFR's largest tenant. Sphere: Related Content

Tuesday, September 23, 2003

TBC Helps Fund Buy of Sears Tire & Battery With 90 Store Leaseback

Chicago Sun Times - September 23, 2003

Sears Roebuck and Co. CEO Alan Lacy continued to dismantle his predecessor's strategy Monday by selling the National Tire & Battery (NTB) chain to the country's largest independent tire retailer and, in the process, opening the way for a new Chicago area rival to Sears' auto centers. TBC paid $260 million through debt financing for the 226-store NTB chain, including inventory worth about $35 million.

TBC Corp., based in Memphis, Tenn., won a bidding war to acquire the 226-store NTB chain, which generates more than $425 million in yearly sales. The deal, which must clear federal anti-trust regulators, is expected to close by Dec. 1.

The company also will sell the land that Sears owns under 90 of the NTB stores lease it back from a real estate company under a sale-leaseback.

Sears will record a pre-tax gain of $50 million to $100 million in the fourth quarter from the NTB sale. The proceeds will boost Sears' cash balance and presumably help it pay to build more Sears Grand stores.

Sears also is reportedly seeking to sell its Orchard Supply hardware stores.

Sphere: Related Content

Monday, September 22, 2003

Cisco Offices in CA Offered at $70 million

Real Estate Alert reports that Ohio State Teachers has received more than 10 bids for Montague Court Technology Park, a 224,000-sf office complex in the San Jose suburb of Milpitas. Some bids top $70 million, which translates into an initial annual yield of roughly 14%. Cisco Systems leases, but does not occupy, the complex through 2010 at a rent of $42.50/sf on a triple-net basis. Colliers International is representing the Ohio fund. Sphere: Related Content

Friday, September 19, 2003

Cargill Offices in MN Sell for $26 Million

Minnesota Real Estate Journal -September 17 2003

Falcon Real Estate Advisors entered the Twin Cities market with the recent purchase of 12700 Whitewater Drive in Minnetonka for $25.95 million. The 148,220 square foot Class A office building near the intersection of Interstate 494 and Highway 62 is 100 percent occupied by Cargill Inc., the largest private company in the United States with annual revenue of $50.8 billion for the fiscal year ending 2002.

Built in 1998, the building is the flagship property in Cargill's 375,000 square foot Crosstown Campus. The seller, Tower Fund, was represented by CB Richard Ellis. The Tower Fund is a commingled equity real estate fund managed by Morristown, New Jersey-based SSR Realty Advisors Inc. Sphere: Related Content

Foster's to Sell and Lease Back 108 Pubs in Australia

The Age - September 20, 2003

Foster's Group will set its pubs and gaming business free with a float this November that could fetch as much as $881 million. The newly listed Australian Leisure and Hospitality will be the nation's biggest pub operator, its third-biggest liquor retailer.

The ALH prospectus released yesterday offers 352.5 million shares, with retail investors able to apply for them at a maximum $2.40 a share from October 1. Institutions will pay between $2 and $2.50.

Foster's also plans to sell units in a separate property trust, the ALE property group that will be listed on the ASX. ALE will own the land and buildings of 105 pubs, which will be leased back to ALH for 25 years initially. Sphere: Related Content

EMI Music HQ in Manhattan Sold

Crain's New York Business - September 19, 2003

L&L Acquisitions, a Manhattan-based property owner and operator, has bought out its partner's 86% stake in 150 Fifth Ave. for more than $102 million.

L&L, led by CEO David Levinson and President Robert Lapidus, bought the property in 2000 for $38 million in a partnership with private equity firm Carlyle Group. In April 2002, the company sold a stake to Bahrain-based investment firm Investcorp for $75 million. In the most recent deal, L&L teamed with a German fund to buy out Investcorp’s stake.

John Fraser, an Investcorp managing director, says Investcorp typically holds its real estate properties for longer periods of time, but that lower interest rates are driving investments in real estate, particularly in buildings with long-term leases in place.

The property at 150 Fifth Avenue is an 11-story, 191,000-square-foot building with ground-floor retail space, and is 99%-leased. Constructed in 1889, the property just underwent a renovation in 2002-2003. It has since entered into a 15-year lease with EMI Music Inc., which uses the property for its North American headquarters.

CB Richard Ellis represented Investcorp in the deal. Citigroup represented L&L." Sphere: Related Content

Thursday, September 18, 2003

GSA Breaks Ground on $331 Million Census Headquarters in MD

WASHINGTON - PRNewswire - September 16, 2003

The U.S. General Services Administration (GSA) joined the U.S. Bureau of the Census (Census) in breaking ground today for a new, $331 million headquarters complex for Census at the Suitland Federal Center in Maryland. The new facility will consist of two, interconnected office buildings with 1.5 million square feet of space and two garages with a total of 3100 parking spaces.

The design for the new headquarters, by Skidmore Owings and Merrill, received a GSA Design Excellence Award for 2002. It includes two interconnected, curvilinear buildings enclosing a series of gardens. Construction will occur through a design/build process, with Skanska USA Building Inc. as the contractor. The first phase of construction, consisting of one office building and one garage, is scheduled to be completed in late 2006. When complete, the project will consolidate Census employees now located on the Suitland campus and in nearby leased space into a single headquarters complex. Sphere: Related Content

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