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.
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Tuesday, September 30, 2003
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
Fitch Issues Report on Corporate Property Sale and Leasebacks
Fitch Ratings - July 23, 2003
In the past few years, the European CMBS market has seen the emergence of property divestment financing from corporate owner occupiers. Sale and leaseback is an increasing trend amongst corporates, for a range of motivations that can include a need for financing, a focus on core business (rather than capital and resources tied up in property) and a rationalisation of space requirements with additional flexibility built into leases. The objective is to outsource property management to an external party, as well as balance sheet management.
Sale and leaseback transactions are not a new phenomenon, but securitisation with regard to such deals is a relatively recent trend in Europe. Traditionally, institutions such as life insurers, major pension funds, or bank financed property companies would be the buyers of these portfolios. However, where highly rated credit tenants are selling property, long-term financing at competitive spreads can be achieved using the credit quality of the rental cash flow underpinned by intrinsic property value.
Recent transactions have included telecom companies, utilities, retail corporates and a defence manufacturing company. Fitch Ratings expects this market to expand considerably over the next few years as debt-burdened companies seek to stabilise their balance sheets. Sphere: Related Content
In the past few years, the European CMBS market has seen the emergence of property divestment financing from corporate owner occupiers. Sale and leaseback is an increasing trend amongst corporates, for a range of motivations that can include a need for financing, a focus on core business (rather than capital and resources tied up in property) and a rationalisation of space requirements with additional flexibility built into leases. The objective is to outsource property management to an external party, as well as balance sheet management.
Sale and leaseback transactions are not a new phenomenon, but securitisation with regard to such deals is a relatively recent trend in Europe. Traditionally, institutions such as life insurers, major pension funds, or bank financed property companies would be the buyers of these portfolios. However, where highly rated credit tenants are selling property, long-term financing at competitive spreads can be achieved using the credit quality of the rental cash flow underpinned by intrinsic property value.
Recent transactions have included telecom companies, utilities, retail corporates and a defence manufacturing company. Fitch Ratings expects this market to expand considerably over the next few years as debt-burdened companies seek to stabilise their balance sheets. Sphere: Related Content
S&P Issues Report On Differences Between CMBS and Lease Backed Deals
S&P Credit Ratings - September 18, 2003
Non-U.S. issuance of CMBS has surged since 1999, from Europe to Japan and Australia to Canada, reaching approximately €30 billion in 2002. The increase in issuance has been marked by a growing and more varied set of borrowers seeking to leverage real estate assets.
As the market develops, CMBS technology is being adapted to securitizations in which the risk profile is determined primarily by the originator's business operations, rather than by the property's characteristics. Although the property component in a transaction's overall risk profile may be significant, it is dominated in the opinion of Standard & Poor's by the operating risks associated with a going concern.
This article examines the key differences in rating approach between standard CMBS transactions and these property intensive corporate securitizations.
In rating standard CMBS debt, Standard & Poor's analysis places emphasis on solving for the level of overcollateralization that supports a specified rating. In rating property intensive corporate securitizations, Standard & Poor's seeks to maximize the value added of a number of variables including business risk, overcollateralization, amortization schedule, final maturity, and capital structure. A property financing whose cash flows come from a single tenant, for example, may have its credit rating limited or linked to the credit rating on the existing tenant. These transactions are typically called "credit lease transactions."
For example, standard CMBS transactions typically have an expected maturity of between five and seven years, with a legal final maturity two or three years later. Property intensive corporate securitizations, in contrast, may extend over far longer periods; a 20-year legal final maturity is not unusual.
The different rating approaches are likely to affect both the capital structure and the highest credit rating that a securitized property financing can achieve.
Sphere: Related Content
Non-U.S. issuance of CMBS has surged since 1999, from Europe to Japan and Australia to Canada, reaching approximately €30 billion in 2002. The increase in issuance has been marked by a growing and more varied set of borrowers seeking to leverage real estate assets.
As the market develops, CMBS technology is being adapted to securitizations in which the risk profile is determined primarily by the originator's business operations, rather than by the property's characteristics. Although the property component in a transaction's overall risk profile may be significant, it is dominated in the opinion of Standard & Poor's by the operating risks associated with a going concern.
This article examines the key differences in rating approach between standard CMBS transactions and these property intensive corporate securitizations.
In rating standard CMBS debt, Standard & Poor's analysis places emphasis on solving for the level of overcollateralization that supports a specified rating. In rating property intensive corporate securitizations, Standard & Poor's seeks to maximize the value added of a number of variables including business risk, overcollateralization, amortization schedule, final maturity, and capital structure. A property financing whose cash flows come from a single tenant, for example, may have its credit rating limited or linked to the credit rating on the existing tenant. These transactions are typically called "credit lease transactions."
For example, standard CMBS transactions typically have an expected maturity of between five and seven years, with a legal final maturity two or three years later. Property intensive corporate securitizations, in contrast, may extend over far longer periods; a 20-year legal final maturity is not unusual.
The different rating approaches are likely to affect both the capital structure and the highest credit rating that a securitized property financing can achieve.
Sphere: Related Content
LaSalle Pays €35 For Sony Distribution Complex in Netherlands
Holland Real Estate - September 18, 2003
LaSalle Investment Management (LIM) has bought the Northeuropean distribution center of Sony Logistics in Tilburg on behalf of one of its closed funds. The total investment volume of this transaction is €35 mln. LIM is a worldwide marketleader in the area of real estate management with €19 bln. in portfolio. The distribution center is the first acquisition of LIM in the Netherlands. An initial return on investment was not announced. Sphere: Related Content
LaSalle Investment Management (LIM) has bought the Northeuropean distribution center of Sony Logistics in Tilburg on behalf of one of its closed funds. The total investment volume of this transaction is €35 mln. LIM is a worldwide marketleader in the area of real estate management with €19 bln. in portfolio. The distribution center is the first acquisition of LIM in the Netherlands. An initial return on investment was not announced. Sphere: Related Content
British Land To Squeeze £75 Million More Out Of Sainsbury Supermarket Portfolio
LONDON - BUSINESS WIRE - Sept. 18, 2003 - Standard & Poor's
Standard & Poor's Ratings Services said today it assigned its preliminary credit ratings to Werretown Supermarkets Securitisations PLC's £75.476 million additional issuance. The collateral is a portfolio of 35 supermarkets located throughout England and Wales owned by British Land Co. PLC and currently let to Sainsbury's Supermarkets Ltd., which is guaranteed by J. Sainsbury PLC (A-/Negative/A-2).
'This additional debt raised on the portfolio of supermarkets let to Sainsbury's reflects significant asset management by British Land over the past two years,' said credit analyst Ronan Fox, director at Standard & Poor's Structured Finance Ratings group in London. 'Ten store extensions have been completed, with a major increase in British Land's economic interest in a store at Croydon.'
Mr. Fox added that the transaction was structured to rate through the default of the tenant and this allowed the rating on the debt to be higher than the rating on the sole tenant. To achieve this higher rating, a liquidity line would continue to pay noteholders in the assumed hypothetical default of the tenant until the cash flows at the property resume following relettings.
The ratings reflect the 10 physical extensions, an increase in the borrower's economic interests in one property, and rent increases following contractual uplifts or rent reviews. Both tranches of additional issuance are fully fungible with existing classes of debt, which were described in Standard & Poor's new issue report of July 4, 2001.
The full presale report for this additional issuance can be found on Standard & Poor's Web site at www.standardandpoors.com. Click on Credit Ratings; then, in the left navigation bar under Browse by Business Line, select Structured Finance; scroll down to Presale Credit Reports to locate the report.
Sphere: Related Content
Standard & Poor's Ratings Services said today it assigned its preliminary credit ratings to Werretown Supermarkets Securitisations PLC's £75.476 million additional issuance. The collateral is a portfolio of 35 supermarkets located throughout England and Wales owned by British Land Co. PLC and currently let to Sainsbury's Supermarkets Ltd., which is guaranteed by J. Sainsbury PLC (A-/Negative/A-2).
'This additional debt raised on the portfolio of supermarkets let to Sainsbury's reflects significant asset management by British Land over the past two years,' said credit analyst Ronan Fox, director at Standard & Poor's Structured Finance Ratings group in London. 'Ten store extensions have been completed, with a major increase in British Land's economic interest in a store at Croydon.'
Mr. Fox added that the transaction was structured to rate through the default of the tenant and this allowed the rating on the debt to be higher than the rating on the sole tenant. To achieve this higher rating, a liquidity line would continue to pay noteholders in the assumed hypothetical default of the tenant until the cash flows at the property resume following relettings.
The ratings reflect the 10 physical extensions, an increase in the borrower's economic interests in one property, and rent increases following contractual uplifts or rent reviews. Both tranches of additional issuance are fully fungible with existing classes of debt, which were described in Standard & Poor's new issue report of July 4, 2001.
The full presale report for this additional issuance can be found on Standard & Poor's Web site at www.standardandpoors.com. Click on Credit Ratings; then, in the left navigation bar under Browse by Business Line, select Structured Finance; scroll down to Presale Credit Reports to locate the report.
Sphere: Related Content
7-Eleven Pursuing Sale & Partial Leaseback of Dallas HQ
GlobeSt.com - Sep 17, 2003 - DALLAS
7-Eleven Inc. has put its 1.4-million-sf world headquarters on the sales block in a bid to rid itself of an 87%-leased, 'non-core asset' and cash in on strong real estate investment appetite. The asset is assessed at $120.9-million.
The 42-story, multi-tenant Cityplace Center East at 2711 N. Haskell Ave., occupies a 10-acre block with four retail pad sites and an underground parking garage. The corporate giant occupies 482,000 sf on floors 29 through 41 plus a portion of the 42nd floor and the basement. 7-Eleven intends to stay put for the long term at an address that houses 1,000 of the corporation's workforce and 325 vendor partners.
Built in 1988 for 7-Eleven's predecessor, the Brazilian granite trophy has 180,700 sf or 13% of its space empty, according to the company. A bidding war is guaranteed, with the key location with easy freeway access to the north of the CBD and a 360-degree view of the city, a full-service conference center, cafeteria and 2,100-sf 7-Eleven concourse store. Sphere: Related Content
7-Eleven Inc. has put its 1.4-million-sf world headquarters on the sales block in a bid to rid itself of an 87%-leased, 'non-core asset' and cash in on strong real estate investment appetite. The asset is assessed at $120.9-million.
The 42-story, multi-tenant Cityplace Center East at 2711 N. Haskell Ave., occupies a 10-acre block with four retail pad sites and an underground parking garage. The corporate giant occupies 482,000 sf on floors 29 through 41 plus a portion of the 42nd floor and the basement. 7-Eleven intends to stay put for the long term at an address that houses 1,000 of the corporation's workforce and 325 vendor partners.
Built in 1988 for 7-Eleven's predecessor, the Brazilian granite trophy has 180,700 sf or 13% of its space empty, according to the company. A bidding war is guaranteed, with the key location with easy freeway access to the north of the CBD and a 360-degree view of the city, a full-service conference center, cafeteria and 2,100-sf 7-Eleven concourse store. Sphere: Related Content
Agence France-Presse Seeking $55.7 Million Leaseback of Paris HQ
Associated Press- September 17, 2003 - PARIS
Employees at the French news agency Agence France-Presse began a 24-hour strike Wednesday to protest a management plan to sell and lease back their headquarters in central Paris. The sale price of the building, $55.7 million, would enable AFP to pay off part of its $72 million four-year deficit for 2000-2003.
AFP's board of directors met Wednesday afternoon to consider the proposal to sell the building to a consortium of insurers for 12 to 18 years. Under the plan, AFP would occupy the building during that period and then repurchase it.
The board decided to postpone consideration of the plan -- which aims to help pay off the agency's deficit -- until Oct. 8. Employees said they opposed the sale/lease-back deal out of fear the company would not have the money to buy back the building, where AFP has been since shortly after the end of World War II.
The strike was observed by editorial and non-editorial workers in France and some other countries where AFP has bureaus, Sharp said. It began at 1 p.m. AFP has more than 2,000 employees, 900 of them working outside France. The agency is present in 165 countries, and has 110 bureaus. Sphere: Related Content
Employees at the French news agency Agence France-Presse began a 24-hour strike Wednesday to protest a management plan to sell and lease back their headquarters in central Paris. The sale price of the building, $55.7 million, would enable AFP to pay off part of its $72 million four-year deficit for 2000-2003.
AFP's board of directors met Wednesday afternoon to consider the proposal to sell the building to a consortium of insurers for 12 to 18 years. Under the plan, AFP would occupy the building during that period and then repurchase it.
The board decided to postpone consideration of the plan -- which aims to help pay off the agency's deficit -- until Oct. 8. Employees said they opposed the sale/lease-back deal out of fear the company would not have the money to buy back the building, where AFP has been since shortly after the end of World War II.
The strike was observed by editorial and non-editorial workers in France and some other countries where AFP has bureaus, Sharp said. It began at 1 p.m. AFP has more than 2,000 employees, 900 of them working outside France. The agency is present in 165 countries, and has 110 bureaus. Sphere: Related Content
Tuesday, September 16, 2003
Lloyds London HQ For Sale For £ 240 Million
Holland Real Estate - September 16, 2003
The German open-ended fund, Deka, is reportedly looking to sell the famous headquarters of Lloyds of London for around £240m. Deka bought the 375,000 sq ft building, at 1 Lime Street, EC3, for £180m back in 1996. The current mooted £240m price tag would reflect a net initial yield of 6.75%. Deka is being advised by CB Richard Ellis and FPDSavills.
The Lloyds HQ is one of several major City office buildings due to come onto the market over the next few months. Scottish Widows has already put ING Barings 50 London Wall, EC2, back on the market after a deal with CGI, which was looking to buy the 240,000 sq ft building for £ 180m, collapsed last March. The building now has a price tag of £ 165m.
Meanwhile, a joint venture between British Land and WestLB is trying to sell two properties from its four-building City portfolio. The 160,000 sq ft 100 New Bridge Street, EC4, is being marketed through DTZ for over £ 110m. The property is currently let to the solicitor, Baker & McKenzie. The joint venture is also selling its multi-let 95,000 sq ft Watling House, 33 Cannon St, EX4, for £ 60m.
Colin Wilson, Head of City Investment at DTZ, commented: "One might have thought the recent jump in the cost of money would have created obstacles, but there is such an appetite for good investment product that demand is just pushing on. This year is going to see an unprecedented cash call on banks for people looking for debt." Sphere: Related Content
The German open-ended fund, Deka, is reportedly looking to sell the famous headquarters of Lloyds of London for around £240m. Deka bought the 375,000 sq ft building, at 1 Lime Street, EC3, for £180m back in 1996. The current mooted £240m price tag would reflect a net initial yield of 6.75%. Deka is being advised by CB Richard Ellis and FPDSavills.
The Lloyds HQ is one of several major City office buildings due to come onto the market over the next few months. Scottish Widows has already put ING Barings 50 London Wall, EC2, back on the market after a deal with CGI, which was looking to buy the 240,000 sq ft building for £ 180m, collapsed last March. The building now has a price tag of £ 165m.
Meanwhile, a joint venture between British Land and WestLB is trying to sell two properties from its four-building City portfolio. The 160,000 sq ft 100 New Bridge Street, EC4, is being marketed through DTZ for over £ 110m. The property is currently let to the solicitor, Baker & McKenzie. The joint venture is also selling its multi-let 95,000 sq ft Watling House, 33 Cannon St, EX4, for £ 60m.
Colin Wilson, Head of City Investment at DTZ, commented: "One might have thought the recent jump in the cost of money would have created obstacles, but there is such an appetite for good investment product that demand is just pushing on. This year is going to see an unprecedented cash call on banks for people looking for debt." Sphere: Related Content
German Fund CGI Buys New PwC HQ in Rotterdam for € 55
Holland Real Estate - September 15, 2003
The German investor Commerz Grundbesitz Investmentsgesellschaft (CGI) has bought the new head office for PricewaterhouseCoopers (PwC) in Rotterdam for € 55 mln. This development by William Properties is approx. 22.000 m² and is the first office development to be built on Brainpark III.
Van Gool & Partners advised CGI with the transaction. The initial return on investment is approx. 7%. The building has been especially developed for PricewaterhouseCoopers and will be delivered mid 2005.
Engineers Arcadis and insurance company Axa will also have offices on Brainpark III. KPMG is also said to have an office here of approx. 25.000 m². Sphere: Related Content
The German investor Commerz Grundbesitz Investmentsgesellschaft (CGI) has bought the new head office for PricewaterhouseCoopers (PwC) in Rotterdam for € 55 mln. This development by William Properties is approx. 22.000 m² and is the first office development to be built on Brainpark III.
Van Gool & Partners advised CGI with the transaction. The initial return on investment is approx. 7%. The building has been especially developed for PricewaterhouseCoopers and will be delivered mid 2005.
Engineers Arcadis and insurance company Axa will also have offices on Brainpark III. KPMG is also said to have an office here of approx. 25.000 m². Sphere: Related Content
Burger King to Pursue $750 Million Sale Leaseback?
Sep 3, 2003 - Yahoo - The Daily Deal by Josh Kosman
In December 2002, Diageo plc sold its troubled Burger King franchise to a consortium of buyout firms led by Texas Pacific Group for the discounted price of $1.4 billion to focus on its core liquor brands, including Johnnie Walker, Guinness and Smirnoff. Diageo agreed to guarantee a loan the acquirer issued to support the buyout. Now Burger King's sales have fallen and Diageo is on the line with a $1 billion loan guarantee package to the chain. Though no one expects Burger King to default on its loans anytime soon, its U.S. stores are struggling, and the loans are losing value. Burger King's sales in the U.S. have fallen about 4% almost every month in 2003 compared with year-earlier period, and several of the company's largest franchisees are troubled. Asset sales could be in the offing.
Most franchisees (7,000 of the 8,000 locations) own the land on which their stores sit, which makes it easy for them to open other fast-food outlets. Burger King also owns the land on its own store locations, and it could sell the real estate for more than $750 million in a leaseback agreement. Burger King currently has about $225 million of cash on its balance sheet, the source close to its owners said. Sphere: Related Content
In December 2002, Diageo plc sold its troubled Burger King franchise to a consortium of buyout firms led by Texas Pacific Group for the discounted price of $1.4 billion to focus on its core liquor brands, including Johnnie Walker, Guinness and Smirnoff. Diageo agreed to guarantee a loan the acquirer issued to support the buyout. Now Burger King's sales have fallen and Diageo is on the line with a $1 billion loan guarantee package to the chain. Though no one expects Burger King to default on its loans anytime soon, its U.S. stores are struggling, and the loans are losing value. Burger King's sales in the U.S. have fallen about 4% almost every month in 2003 compared with year-earlier period, and several of the company's largest franchisees are troubled. Asset sales could be in the offing.
Most franchisees (7,000 of the 8,000 locations) own the land on which their stores sit, which makes it easy for them to open other fast-food outlets. Burger King also owns the land on its own store locations, and it could sell the real estate for more than $750 million in a leaseback agreement. Burger King currently has about $225 million of cash on its balance sheet, the source close to its owners said. Sphere: Related Content
Heron International and AXA in New Property Fund
ThisisLondon - 10 September 2003
Propertty tycoon Gerald Ronson and the specialist property arm of French insurer AXA are setting up a £250m fund to invest in hotels, offices, warehouses and shops. Their aim is to expand the fund to about £1bn by attracting other institutional investors.
The fund aims to strike deals with firms eager to offload property to strengthen their balance sheets. AXA struck a deal of this type last year when it bought £150m of retail warehouses from Big Food Group and leased them back.
The insurer hopes that by teaming up with Ronson and his firm Heron International it will benefit from his entrepreneurial approach and contacts. " Sphere: Related Content
Propertty tycoon Gerald Ronson and the specialist property arm of French insurer AXA are setting up a £250m fund to invest in hotels, offices, warehouses and shops. Their aim is to expand the fund to about £1bn by attracting other institutional investors.
The fund aims to strike deals with firms eager to offload property to strengthen their balance sheets. AXA struck a deal of this type last year when it bought £150m of retail warehouses from Big Food Group and leased them back.
The insurer hopes that by teaming up with Ronson and his firm Heron International it will benefit from his entrepreneurial approach and contacts. " Sphere: Related Content
PREFCO Sells KeyBank Property Portfolio For $36.8 Million
JENKINTOWN, Pa., Sept. 16 /PRNewswire-FirstCall
American Financial Realty Trust (NYSE: AFR) has acquired from Prefco Quatre, LLC 31 (Pitney Bowes Real Estate Financing Corporation) properties previously acquired from KeyBank, N.A. in a long term sale leaseback transaction. The 31 bank branch properties are located in Ohio and consist of 154,000 rentable square feet. The properties are leased on a bond net basis through November 7, 2011 to KeyBank. The total acquisition cost was approximately $36.8 million." Sphere: Related Content
American Financial Realty Trust (NYSE: AFR) has acquired from Prefco Quatre, LLC 31 (Pitney Bowes Real Estate Financing Corporation) properties previously acquired from KeyBank, N.A. in a long term sale leaseback transaction. The 31 bank branch properties are located in Ohio and consist of 154,000 rentable square feet. The properties are leased on a bond net basis through November 7, 2011 to KeyBank. The total acquisition cost was approximately $36.8 million." Sphere: Related Content
Monday, September 15, 2003
CVS completes $29 Million Sale Leaseback of 8 Stores
Pacific Business News (Honolulu) - Sept 15, 2003
Honolulu, Hawaii-based Persis Corp. has completed a $29 million sale-leaseback transaction of eight new retail properties in five states with public traded CVS Corp.
CVS Corp. developed the properties, then sold them to Persis to satisfy the requirements of a 1031 exchange. In exchange, CVS signed 25-year absolute net leases for all of the properties. Under the terms, the landlord is not responsible for repair, maintenance, replacement or other property expenses.
Persis CEO Michael Pfeffer said the company was pleased with the risk profile of the investment. 'A sale-leaseback transaction with the tenant allowed us to achieve our yield requirements in a highly priced commercial real estate market,' said Easton Manson of Persis Asset Advisors. 'The term of the lease and credit of the tenant also allowed our lender, CSFirstBoston, to maximize the liquidity available to Persis.'
Persis has slowed its acquisitions due to high prices and a lower yielding commercial real estate market. Persis is a privately held family company established in Honolulu in 1856. The company owns and manages more than 2 million square feet of distribution, office and retail facilities nationwide. Sphere: Related Content
Honolulu, Hawaii-based Persis Corp. has completed a $29 million sale-leaseback transaction of eight new retail properties in five states with public traded CVS Corp.
CVS Corp. developed the properties, then sold them to Persis to satisfy the requirements of a 1031 exchange. In exchange, CVS signed 25-year absolute net leases for all of the properties. Under the terms, the landlord is not responsible for repair, maintenance, replacement or other property expenses.
Persis CEO Michael Pfeffer said the company was pleased with the risk profile of the investment. 'A sale-leaseback transaction with the tenant allowed us to achieve our yield requirements in a highly priced commercial real estate market,' said Easton Manson of Persis Asset Advisors. 'The term of the lease and credit of the tenant also allowed our lender, CSFirstBoston, to maximize the liquidity available to Persis.'
Persis has slowed its acquisitions due to high prices and a lower yielding commercial real estate market. Persis is a privately held family company established in Honolulu in 1856. The company owns and manages more than 2 million square feet of distribution, office and retail facilities nationwide. Sphere: Related Content
Saturday, September 13, 2003
Cendant Completes $25 Sale Leaseback in CA
Inman News September 10, 2003
Coldwell Banker Commercial-North County Properties has sold the 133,726-square-foot Cendant Corporate Center in Mission Viejo, Orange County, Calif. The value of the transaction was $25 million. Cendant Corporate Center is comprised of two four-story office buildings on seven acres. Olen Properties was the buyer. Cendant Corp. is a real estate brokerage franchiser, hotel franchisor, vacation home ownership and car rental operator, in addition to being the parent company of Coldwell Banker. Six separate business units within Cendant have leased back approximately 75 percent of the two buildings, including Coldwell Banker Residential NRT, Century 21 Real Estate, Cendant Mobility, Hotel Franchise sales, RCI and Settlement Services. Sphere: Related Content
Coldwell Banker Commercial-North County Properties has sold the 133,726-square-foot Cendant Corporate Center in Mission Viejo, Orange County, Calif. The value of the transaction was $25 million. Cendant Corporate Center is comprised of two four-story office buildings on seven acres. Olen Properties was the buyer. Cendant Corp. is a real estate brokerage franchiser, hotel franchisor, vacation home ownership and car rental operator, in addition to being the parent company of Coldwell Banker. Six separate business units within Cendant have leased back approximately 75 percent of the two buildings, including Coldwell Banker Residential NRT, Century 21 Real Estate, Cendant Mobility, Hotel Franchise sales, RCI and Settlement Services. Sphere: Related Content
Wednesday, September 10, 2003
CSFB Manhattan HQ For Sale for $800 Million?
Real Estate Finance & Investment reports that MetLife is reportedly planning to sell the hulking 2.25-million-square-foot office building at 11 Madison Ave. right next to its corporate headquarters. Jennie Morgan, a MetLife spokeswoman, said she was unaware of any sales plans for the office but sources told REFI that the Manhattan-based insurance company will kick off a sale soon. 'We've made no announcement and it is our policy not to comment on rumor or speculation,' Morgan said.
The planned sale comes on the heels of Macklowe Properties planned acquisition of the GM Building in midtown for a record $1.4 billion. The 29-story office occupies an entire city block between 24th and 25th Streets and is leased long term to Credit Suisse First Boston (CSFB). If lease terms are attractive, 11 Madison Ave. could fetch as much as $800 million. It is unclear if MetLife has tapped a broker at this point.
(Eastdil Realty and Lehman Brothers are rumored to have been jointly awarded the listing. MetLife's 2002 10-K indicates that it has leased One Madison Ave. and the 11 Madison Ave. to CSFB, under a long-term lease. MetLife is in turn subleasing 365,000 sf in One Madison Ave. for its own use from CSFB.)
The limestone edifice, next to MetLife's 1.4-million-square-foot headquarters at One Madison Ave., was renovated and redesigned between 1994 and 1997 at a cost of approximately $300 million. It was originally known as the North Building and is connected to the company's One Madison Ave. via a sky bridge. Architects Harvey Wiley Corbett and D. Everett Waid designed the building between 1929 and 1950. Originally planned as a 100-story tower, the developer's plans were scaled back after the 1929 stock market crash.
MetLife has been shifting its employees out of 11 Madison Ave. and out of the headquarters building that once housed about 2,200 employees, relocating staff throughout metro Manhattan. It still maintains One Madison Ave. as its headquarters building. plans of that building could not be ascertained. Sphere: Related Content
Ausis Gorging on US Real Estate
Australia Property Investment Vehicles Seek A$1 Billion in US Real Estate
September 3, DOW JONES NEWSWIRES SYDNEY - Major Australian institutional investors will fly to the U.S. for roadshows next week as investment banks seek to raise approximately A$1 billion to bring two real estate investment trusts to the Australian market by the end of 2003.
U.S.-based shopping center development and management firm CBL & Associates Properties Inc. along with Australia-based Galileo Funds Management are believed to be seeking to raise up to A$500 million to form a listed property trust which will hold U.S. retail assets. Merrill Lynch has been appointed to work on the trust, which will be listed on the Australian Stock Exchange.
Meanwhile, UBS has been working on the details of an initial public offering involving Macquarie Bank Ltd. and U.S.-based Developers Diversified Realty Corp. Macquarie DDR Property Trust will hold U.S. shopping mall assets. They are taking fund managers on a U.S. roadshow in the next few weeks. Its property vehicle may also seek equity of around A$500 million,
A recent story from Bloomberg reported that Australia's Centro Properties Group, Australia's largest manager of shopping malls by number, agreed to buy almost half of a $488 million portfolio of 14 U.S. shopping centers in California, amid dwindling opportunities to expand at home. The high demand for retail property in Australia is making it more difficult for Prime to grow domestically.
There's been about $7 billion of takeovers in Australia's property-trust industry this year, according to Bloomberg data, driven by a shortage of urban land for new developments. That's driven real estate managers such as ING Office Fund and Principal Office Fund, recently taken over by Investa Property Group, to seek expansion in the U.S.
Sydney-based Westfield Holdings Ltd. is already established in the U.S. It's joined U.S.-based Simon Property Group Inc. in a $4.25 billion bid for Taubman Centers Inc., which would give the companies 30 U.S. malls, including the Beverly Center in Los Angeles. Westfield is already the No. 4 manager of U.S. shopping malls.
Sphere: Related Content
September 3, DOW JONES NEWSWIRES SYDNEY - Major Australian institutional investors will fly to the U.S. for roadshows next week as investment banks seek to raise approximately A$1 billion to bring two real estate investment trusts to the Australian market by the end of 2003.
U.S.-based shopping center development and management firm CBL & Associates Properties Inc. along with Australia-based Galileo Funds Management are believed to be seeking to raise up to A$500 million to form a listed property trust which will hold U.S. retail assets. Merrill Lynch has been appointed to work on the trust, which will be listed on the Australian Stock Exchange.
Meanwhile, UBS has been working on the details of an initial public offering involving Macquarie Bank Ltd. and U.S.-based Developers Diversified Realty Corp. Macquarie DDR Property Trust will hold U.S. shopping mall assets. They are taking fund managers on a U.S. roadshow in the next few weeks. Its property vehicle may also seek equity of around A$500 million,
A recent story from Bloomberg reported that Australia's Centro Properties Group, Australia's largest manager of shopping malls by number, agreed to buy almost half of a $488 million portfolio of 14 U.S. shopping centers in California, amid dwindling opportunities to expand at home. The high demand for retail property in Australia is making it more difficult for Prime to grow domestically.
There's been about $7 billion of takeovers in Australia's property-trust industry this year, according to Bloomberg data, driven by a shortage of urban land for new developments. That's driven real estate managers such as ING Office Fund and Principal Office Fund, recently taken over by Investa Property Group, to seek expansion in the U.S.
Sydney-based Westfield Holdings Ltd. is already established in the U.S. It's joined U.S.-based Simon Property Group Inc. in a $4.25 billion bid for Taubman Centers Inc., which would give the companies 30 U.S. malls, including the Beverly Center in Los Angeles. Westfield is already the No. 4 manager of U.S. shopping malls.
Sphere: Related Content
Tuesday, September 09, 2003
Corporate Real Estate Executives Challenged by Excess Space
CHICAGO, Sep 8, 2003 /PRNewswire-FirstCall via COMTEX
A survey issued today by Jones Lang LaSalle reveals that corporate real estate executives (CRE executives) are cautiously optimistic about the economy, but are still struggling to deal with a substantial inventory of excess space. Furthermore, new accounting rules regarding the impairment of excess space have created additional hurdles for CRE executives.
'While the past couple of years have been difficult for CRE executives, some important lessons have been learned,' said Richard McBlaine, President, Strategic Consulting, Jones Lang LaSalle. 'The next real estate cycle should see CRE executives putting greater emphasis on the flexibility of their portfolios. At the same time, the new accounting rules governing the impairment of excess space should ultimately bring additional visibility to real estate markets.'
Among the survey's findings:
-- CRE executives are generally optimistic regarding the economy. Almost half (49 percent) state that they are either 'highly optimistic' or 'somewhat optimistic.'
-- More than a third (35 percent) report that their excess capacity is more than 15 percent of their current portfolio, while 60 percent claim levels above 10 percent.
-- Two-thirds of CRE executives expect to add space by 2005, with
approximately 20 percent expecting to need space imminently in 2003 or 2004.
-- While more than 20 percent of respondents have impaired more than 50 percent of their excess space, almost half have impaired less than 10 percent.
-- "Lack of flexibility in existing portfolio" was cited as the biggest
hurdle in reducing real estate costs. Sphere: Related Content
A survey issued today by Jones Lang LaSalle reveals that corporate real estate executives (CRE executives) are cautiously optimistic about the economy, but are still struggling to deal with a substantial inventory of excess space. Furthermore, new accounting rules regarding the impairment of excess space have created additional hurdles for CRE executives.
'While the past couple of years have been difficult for CRE executives, some important lessons have been learned,' said Richard McBlaine, President, Strategic Consulting, Jones Lang LaSalle. 'The next real estate cycle should see CRE executives putting greater emphasis on the flexibility of their portfolios. At the same time, the new accounting rules governing the impairment of excess space should ultimately bring additional visibility to real estate markets.'
Among the survey's findings:
-- CRE executives are generally optimistic regarding the economy. Almost half (49 percent) state that they are either 'highly optimistic' or 'somewhat optimistic.'
-- More than a third (35 percent) report that their excess capacity is more than 15 percent of their current portfolio, while 60 percent claim levels above 10 percent.
-- Two-thirds of CRE executives expect to add space by 2005, with
approximately 20 percent expecting to need space imminently in 2003 or 2004.
-- While more than 20 percent of respondents have impaired more than 50 percent of their excess space, almost half have impaired less than 10 percent.
-- "Lack of flexibility in existing portfolio" was cited as the biggest
hurdle in reducing real estate costs. Sphere: Related Content
US Govt Signs 350,000 SF Build-to-Suit
BUSINESS WIRE - Aug. 27, 2003 - RALEIGH, NC
Highwoods Properties, Inc. (NYSE: HIW - News), the largest owner and operator of suburban office properties in the Southeast, today announced that it has been awarded a 350,000 square foot build-to-suit contract by the National Archives and Records Administration (NARA), an independent agency of the United States Government. Under the terms of the contract, Highwoods will build a records storage facility on a site at SouthPark in Clayton County, Georgia, which will be 100% occupied by NARA under a 20-year lease.
The new facility will have seven bays for a maximum capacity of 1.75 million cubic feet for the storage of textual records and 35,000 square feet dedicated to training and conference rooms, an expansive public research room and office space to accommodate NARA staff members and contractors, as well as visitors and patrons. Two of the seven storage bays and the office area are scheduled to be completed and ready for occupancy by July 2004, with the remaining five storage bays being delivered one bay per quarter through October 2005. Ernst and Young represented NARA in the bidding process. " Sphere: Related Content
Highwoods Properties, Inc. (NYSE: HIW - News), the largest owner and operator of suburban office properties in the Southeast, today announced that it has been awarded a 350,000 square foot build-to-suit contract by the National Archives and Records Administration (NARA), an independent agency of the United States Government. Under the terms of the contract, Highwoods will build a records storage facility on a site at SouthPark in Clayton County, Georgia, which will be 100% occupied by NARA under a 20-year lease.
The new facility will have seven bays for a maximum capacity of 1.75 million cubic feet for the storage of textual records and 35,000 square feet dedicated to training and conference rooms, an expansive public research room and office space to accommodate NARA staff members and contractors, as well as visitors and patrons. Two of the seven storage bays and the office area are scheduled to be completed and ready for occupancy by July 2004, with the remaining five storage bays being delivered one bay per quarter through October 2005. Ernst and Young represented NARA in the bidding process. " Sphere: Related Content
Monday, September 08, 2003
St George to Sell & Leaseback 25 Bank Branches
Australian Financial Review - August 14
St George Bank is to auction another group of bank branches as it seeks to capitalise on strong demand at the smaller end of the commercial investment market. Fifteen bank branches in NSW will go under the hammer on September 17, and 10 South Australian branches will be auctioned on September 18.
The bank is likely to realise more than it originally expected because some of the high-value branches in NSW - Darlinghurst, Crows Nest, Bondi Junction and Avalon - are to be sold. The other branches being offered in NSW are Bathurst, Chatswood, Coffs Harbour, Eastwood, Grafton and Ingleburn. At earlier St George Bank sales, NSW buyers have pursued properties in South Australia to secure slightly higher-yielding investments.
CB Richard Ellis is handling the sales after it conducted the sale and leaseback of 10 bank branches for St George in June. The earlier sales generated about $24 million, yields ranging from 9.23 per cent in Wagga Wagga to 4.17 per cent in Oatley.
CB Richard Ellis's associate director, metropolitan investment sales, Flint Davidson, will co-ordinate the project. The agent has handled three sale and leaseback programs for the bank in the past three years and has sold several branches in the 4 per cent yield bracket. The properties sold in St George Bank's initial $27 million sale and leaseback campaign in 2001 have also had strong capital growth. Private investors have been buying bank branches because of their relatively long leaseback deals and because statutory charges are paid by the tenant.
All the branches being offered have five-year leasebacks, with two rights of renewal of five years, and the bank has committed to 3.5 per cent in annual rent increases. In Western Australia, BankWest sold three branches in June for more than $11 million. Yields ranged between 8.1 per cent and 5.1 per cent.
Colliers International director Ian Mekle, who handled the sales, said the market was still strong for well-leased strip assets. "The yields reflect the demand for this type of product and the shortage of this type of stock," he said. "Banks are doing it because they can earn a better return on the capital than leaving it sitting in property." Sphere: Related Content
St George Bank is to auction another group of bank branches as it seeks to capitalise on strong demand at the smaller end of the commercial investment market. Fifteen bank branches in NSW will go under the hammer on September 17, and 10 South Australian branches will be auctioned on September 18.
The bank is likely to realise more than it originally expected because some of the high-value branches in NSW - Darlinghurst, Crows Nest, Bondi Junction and Avalon - are to be sold. The other branches being offered in NSW are Bathurst, Chatswood, Coffs Harbour, Eastwood, Grafton and Ingleburn. At earlier St George Bank sales, NSW buyers have pursued properties in South Australia to secure slightly higher-yielding investments.
CB Richard Ellis is handling the sales after it conducted the sale and leaseback of 10 bank branches for St George in June. The earlier sales generated about $24 million, yields ranging from 9.23 per cent in Wagga Wagga to 4.17 per cent in Oatley.
CB Richard Ellis's associate director, metropolitan investment sales, Flint Davidson, will co-ordinate the project. The agent has handled three sale and leaseback programs for the bank in the past three years and has sold several branches in the 4 per cent yield bracket. The properties sold in St George Bank's initial $27 million sale and leaseback campaign in 2001 have also had strong capital growth. Private investors have been buying bank branches because of their relatively long leaseback deals and because statutory charges are paid by the tenant.
All the branches being offered have five-year leasebacks, with two rights of renewal of five years, and the bank has committed to 3.5 per cent in annual rent increases. In Western Australia, BankWest sold three branches in June for more than $11 million. Yields ranged between 8.1 per cent and 5.1 per cent.
Colliers International director Ian Mekle, who handled the sales, said the market was still strong for well-leased strip assets. "The yields reflect the demand for this type of product and the shortage of this type of stock," he said. "Banks are doing it because they can earn a better return on the capital than leaving it sitting in property." Sphere: Related Content
Aviva Considering Sale Leaseback of UK Property Portfolio
The Times - London - 08 September 2003
AVIVA, the insurance group, is considering plans to outsource the management and ownership of its six million sq ft property portfolio in the UK.
The company, which has offices stretching from Perth in Scotland to London and Norwich, has appointed Deloitte & Touche, the accountants, to conduct a strategic review of its office portfolio and recommend ways to run the estate more efficiently. Deloitte & Touche is expected to deliver a range of options in the autumn, which could include transferring the ownership and management to a specialist property outsourcing company, or transferring the property management function but retaining ownership of the properties.
Aviva houses about 33,000 employees in several hundred buildings. The group’s property holdings are more complex than most companies because it was spawned from a series of mergers. Commercial General Union initially merged with General Accident in 1998; two years later the group, renamed CGU, merged with Norwich Union to form CGNU. In 2002 the business was rebranded as Aviva.
A spokesman for Aviva confirmed that the insurance company was reviewing options but insisted that the move was not cost-related. “This is about ensuring we have the right offices for our staff which can deliver our business objectives. It is not in any way linked with a desire to raise funds,” he said.
Sphere: Related Content
AVIVA, the insurance group, is considering plans to outsource the management and ownership of its six million sq ft property portfolio in the UK.
The company, which has offices stretching from Perth in Scotland to London and Norwich, has appointed Deloitte & Touche, the accountants, to conduct a strategic review of its office portfolio and recommend ways to run the estate more efficiently. Deloitte & Touche is expected to deliver a range of options in the autumn, which could include transferring the ownership and management to a specialist property outsourcing company, or transferring the property management function but retaining ownership of the properties.
Aviva houses about 33,000 employees in several hundred buildings. The group’s property holdings are more complex than most companies because it was spawned from a series of mergers. Commercial General Union initially merged with General Accident in 1998; two years later the group, renamed CGU, merged with Norwich Union to form CGNU. In 2002 the business was rebranded as Aviva.
A spokesman for Aviva confirmed that the insurance company was reviewing options but insisted that the move was not cost-related. “This is about ensuring we have the right offices for our staff which can deliver our business objectives. It is not in any way linked with a desire to raise funds,” he said.
Sphere: Related Content
Friday, September 05, 2003
Irish Life Buys Bank of Scotland’s New HQ in Edinburgh
Irish Life has paid over £40m for Bank of Scotland’s new offices in Edinburgh. The 101,453 sq ft Citymark building in Edinburgh’s Exchange district, was let to the bank in March. The deal reflects an exceptionally low yield of 5.9%, one of the lowest seen on an office scheme in this cycle. Citymark was developed by Fountainbridge Developments, a joint venture between Bank of Scotland and AB Hamilton. It is let to BoS at a rate of £24.50 per sq ft. John Slade of Slade & Co, which advised Irish Life, said: “It went to best offers. We’ve got Bank of Scotland for a long time, which is a very secure covenant. Compared with what you could get in the bond market it’s a good yield.” Last autumn, the scheme had been under offer to Abbey National, which then pulled out as part of a wider review of its property commitments.
Sphere: Related Content
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Wednesday, September 03, 2003
KinderCare Completes $300 Million Securitization of 475 Child Care Centers
Morgan Stanley Capital I Inc. Series 2003-KIDS
KinderCare, the largest provider of for profit preschool services in the U.S., has completed the securitization of 475 child care centers raising a total of $300 million. The mortgaged properties are located in 33 states and were built between 1959 and 2002 and total 3.3 million square feet.
KinderCare was established in 1969 andcurrently operates 1,278 child care centers in 39 states. At KinderCare's centers, educational services are provided to infants and children up to the age of 12. The majority of children enrolled in KinderCare centers are between the ages of six weeks and five years. As of March 7, 2003, the trailing 12 month occupancy of the mortgaged properties was 66.8%. KinderCare is owned by Kohlberg, Kravis & Roberts (KKR), an investment firm that makes equity investments in management buyouts on behalf of its investment funds.
The mortgage loan was originated by Morgan Stanley Mortgage Capital Inc. on July 2, 2003, in the amount of $300 million. The mortgage loan bears interest at LIBOR, which is adjusted monthly, plus a gross margin, which has been set at 2.25%. Principal payments are required monthly based on a 30-year amortization schedule. The borrower has entered into an initial interest rate cap agreement with Morgan Stanley Capital Services Inc. (which has a short-term rating of 'A-1'). The cap has an initial LIBOR strike price of 6.50% and expires July 9, 2006, two years prior to the maturity date of the loan. Upon expiration, the loan documents require the borrower to obtain a replacement interest rate cap. The mortgage loan matures on July 9, 2008; however, the loan also provides for one, one-year extension. The mortgage loan cannot be prepaid during the first two loan years. Beginning in the third year, $5 million of the loan can be prepaid each year with a prepayment premium that begins at 3.0% of the outstanding principal balance and declines annually, eventually reaching 0.0% in the final loan year.
Sphere: Related Content
KinderCare, the largest provider of for profit preschool services in the U.S., has completed the securitization of 475 child care centers raising a total of $300 million. The mortgaged properties are located in 33 states and were built between 1959 and 2002 and total 3.3 million square feet.
KinderCare was established in 1969 andcurrently operates 1,278 child care centers in 39 states. At KinderCare's centers, educational services are provided to infants and children up to the age of 12. The majority of children enrolled in KinderCare centers are between the ages of six weeks and five years. As of March 7, 2003, the trailing 12 month occupancy of the mortgaged properties was 66.8%. KinderCare is owned by Kohlberg, Kravis & Roberts (KKR), an investment firm that makes equity investments in management buyouts on behalf of its investment funds.
The mortgage loan was originated by Morgan Stanley Mortgage Capital Inc. on July 2, 2003, in the amount of $300 million. The mortgage loan bears interest at LIBOR, which is adjusted monthly, plus a gross margin, which has been set at 2.25%. Principal payments are required monthly based on a 30-year amortization schedule. The borrower has entered into an initial interest rate cap agreement with Morgan Stanley Capital Services Inc. (which has a short-term rating of 'A-1'). The cap has an initial LIBOR strike price of 6.50% and expires July 9, 2006, two years prior to the maturity date of the loan. Upon expiration, the loan documents require the borrower to obtain a replacement interest rate cap. The mortgage loan matures on July 9, 2008; however, the loan also provides for one, one-year extension. The mortgage loan cannot be prepaid during the first two loan years. Beginning in the third year, $5 million of the loan can be prepaid each year with a prepayment premium that begins at 3.0% of the outstanding principal balance and declines annually, eventually reaching 0.0% in the final loan year.
Sphere: Related Content
BBC Completes $1.33 Billion Lease-Leaseback of London HQ
Juturna (European Loan Conduit No. 16) plc
The above link leads to the presale report on the Moody's Investor Servces web site which details The British Broadcasting Corporation's (BBC) Lease-Leaseback financing and redevelopment of its London headquarters, Broadcasting House. The securitization raised $1.33 billion (GBP 800 million) for the redevelopment Morgan Stanley managed the issue. BBC will pledge to bondholders the rental payments on its 150-year lease on its art deco building, shaped like a luxury liner, in London's West End. The fully amortizing Notes have a legal maturity of 30 years (weighted average life of 22.3 years.) with principal repayments being index-linked to the Retail Price Index, subject to a floor of 0% and a cap of 5%. An unconditional Financial Guarantee was provided by MBIA for scheduled payment of interest and principal under the Notes. The bondable, 30-year occupational lease with the BBC as sole tenant does not expose Noteholders to any development and/or construction risk. The securities were sold through Juturna (European Loan Conduit No. 16) PLC, a special purpose entity.
Sphere: Related Content
The above link leads to the presale report on the Moody's Investor Servces web site which details The British Broadcasting Corporation's (BBC) Lease-Leaseback financing and redevelopment of its London headquarters, Broadcasting House. The securitization raised $1.33 billion (GBP 800 million) for the redevelopment Morgan Stanley managed the issue. BBC will pledge to bondholders the rental payments on its 150-year lease on its art deco building, shaped like a luxury liner, in London's West End. The fully amortizing Notes have a legal maturity of 30 years (weighted average life of 22.3 years.) with principal repayments being index-linked to the Retail Price Index, subject to a floor of 0% and a cap of 5%. An unconditional Financial Guarantee was provided by MBIA for scheduled payment of interest and principal under the Notes. The bondable, 30-year occupational lease with the BBC as sole tenant does not expose Noteholders to any development and/or construction risk. The securities were sold through Juturna (European Loan Conduit No. 16) PLC, a special purpose entity.
Sphere: Related Content
CVS Completes $127.5 Million Lease Financing of 46 Stores
MOODY'S ASSIGNS RATING OF (P)A2 TO CVS LEASE-BACKED PASS-THROUGH CERTIFICATES, SERIES 2003-1
New York, September 03, 2003 -- Based on information received through September 3, 2003, Moody's Investors Service assigns a provisional (P) A2 rating to approximately $127.5 million of Certificates to be issued by a trust that will acquire 46 first-priority lien commercial mortgage, credit-tenant lease loans. The loans will be secured by newly constructed drug stores and related realty that will be triple-net leased to subsidiaries of CVS Corporation. Each of the leases will be bondable and guaranteed by CVS Corporation, and bankruptcy-remote, special purpose borrowers will own each of the properties. The loans generally mature in 2025. Fixed net rent under the leases, plus a pre-funded interest reserve, will be sufficient to pay in full all interest and principal of the loans. The 46 drugstores are located in eighteen states.
Moody's determined that the dark value of the collateral is sufficient, assuming a bankruptcy of CVS and rejection of the leases, to support the expected loss consistent with the Certificates' rating. The rating of the Certificates is primarily based on the senior unsecured debt rating of CVS Corporation, which is currently A2, negative outlook; therefore, the Certificates' rating will change as the senior unsecured debt rating of CVS Corporation may change. The rating of the Certificates was also based on the overall structure and legal integrity of the transaction.
Sphere: Related Content
New York, September 03, 2003 -- Based on information received through September 3, 2003, Moody's Investors Service assigns a provisional (P) A2 rating to approximately $127.5 million of Certificates to be issued by a trust that will acquire 46 first-priority lien commercial mortgage, credit-tenant lease loans. The loans will be secured by newly constructed drug stores and related realty that will be triple-net leased to subsidiaries of CVS Corporation. Each of the leases will be bondable and guaranteed by CVS Corporation, and bankruptcy-remote, special purpose borrowers will own each of the properties. The loans generally mature in 2025. Fixed net rent under the leases, plus a pre-funded interest reserve, will be sufficient to pay in full all interest and principal of the loans. The 46 drugstores are located in eighteen states.
Moody's determined that the dark value of the collateral is sufficient, assuming a bankruptcy of CVS and rejection of the leases, to support the expected loss consistent with the Certificates' rating. The rating of the Certificates is primarily based on the senior unsecured debt rating of CVS Corporation, which is currently A2, negative outlook; therefore, the Certificates' rating will change as the senior unsecured debt rating of CVS Corporation may change. The rating of the Certificates was also based on the overall structure and legal integrity of the transaction.
Sphere: Related Content
Home Depot Signs 772,000 SF Build-to-Suit For Warehouse in Cranbury, NJ
Keystone Property Trust (NYSE: KTR) today announced that it has reached an agreement to develop an approximately 772,000 square foot distribution center for Home Depot USA, Inc. on 87 acres currently under contract at Station Road in Cranbury, NJ. The initial term of the lease will be for 12 years, and Keystone will retain ownership of the asset.
The project, located in the Exit 8A submarket, will be a modern, 32' clear, cross-docked facility with 150 dock doors, 238 car parking spaces, 426 trailer parking spaces, and an ESFR sprinkler system. The facility will have expansion capability of an additional 150,000 SF. Construction is expected to begin in October with occupancy scheduled for the fourth quarter of 2004. The project costs are estimated to be approximately $40 million." Sphere: Related Content
The project, located in the Exit 8A submarket, will be a modern, 32' clear, cross-docked facility with 150 dock doors, 238 car parking spaces, 426 trailer parking spaces, and an ESFR sprinkler system. The facility will have expansion capability of an additional 150,000 SF. Construction is expected to begin in October with occupancy scheduled for the fourth quarter of 2004. The project costs are estimated to be approximately $40 million." Sphere: Related Content
Tuesday, September 02, 2003
Bank of America Closes $770 Million Sale Leaseback of 158 Properties
Bank of America Closes $770 Million Sale Leaseback of 158 Properties
Bank of America Corp. has closed its deal to sell 158 buildings with 8.1 million square feet of space to American Financial Realty Trust (NYSE: AFR) for $769.8 million as part of a sale and leaseback agreement. The seller was Bank of America NA, a subsidiary of Bank of America Corp. The properties consist of office buildings, bank branches and operations centers in 19 states.
The deal had raised a few eyebrows on Wall Street because Banc of America Securities Inc. was one of two lead managers for American Financial's initial public offering the previous week. Much of the money raised in that IPO was to be used to close this deal. BofA and Wachovia Corp., one of the underwriters of the offering, are among American Financial's largest customers.
The IPO went very well, raising more than $740 million for the company, after fees, on the sale almost 64 million shares at $12.50 each. About 200,000 of those shares were offered by selling shareholders, and the proceeds for those sales did not go to the company. That total also included 8.9 million shares allocated to underwriters for over allotments on the sale.
The Pennsylvania-based REIT specializes in owning and managing properties for financial institutions. Before this latest deal, it owned 274 buildings, including 219 bank branches. BofA will lease 5.2 million square feet of the portfolio it sold to American Financial for 20 years on a triple-net basis. The Charlotte-based bank will also lease an additional 804,000 square feet on a short-term basis. Approximately 813,000 square feet are leased to third party tenants already.
The properties include office buildings, banking and operations centers located in 19 states, including the Bank of America Center in Chicago, a 1 million square-foot, 50-story office building across from the Chicago Board of Trade in the financial district. Sphere: Related Content
Bank of America Corp. has closed its deal to sell 158 buildings with 8.1 million square feet of space to American Financial Realty Trust (NYSE: AFR) for $769.8 million as part of a sale and leaseback agreement. The seller was Bank of America NA, a subsidiary of Bank of America Corp. The properties consist of office buildings, bank branches and operations centers in 19 states.
The deal had raised a few eyebrows on Wall Street because Banc of America Securities Inc. was one of two lead managers for American Financial's initial public offering the previous week. Much of the money raised in that IPO was to be used to close this deal. BofA and Wachovia Corp., one of the underwriters of the offering, are among American Financial's largest customers.
The IPO went very well, raising more than $740 million for the company, after fees, on the sale almost 64 million shares at $12.50 each. About 200,000 of those shares were offered by selling shareholders, and the proceeds for those sales did not go to the company. That total also included 8.9 million shares allocated to underwriters for over allotments on the sale.
The Pennsylvania-based REIT specializes in owning and managing properties for financial institutions. Before this latest deal, it owned 274 buildings, including 219 bank branches. BofA will lease 5.2 million square feet of the portfolio it sold to American Financial for 20 years on a triple-net basis. The Charlotte-based bank will also lease an additional 804,000 square feet on a short-term basis. Approximately 813,000 square feet are leased to third party tenants already.
The properties include office buildings, banking and operations centers located in 19 states, including the Bank of America Center in Chicago, a 1 million square-foot, 50-story office building across from the Chicago Board of Trade in the financial district. Sphere: Related Content
Franklin Covey Seeks Sale Leaseback of HQ
Real Estate Alert reports that Franklin Covey, an efficiency-training company co-headed by author Stephen Covey, is shopping the 312,000-square-foot property, known as Corporate Campus in Salt Lake City, Utah. The company is asking $33.8 million for its five-building headquarters complex, which it wants to continue occupying under a sale leaseback arrangement. At the asking price of $109/sf, the buyer's initial annual yield would be 9%. NAI Investment Property has the listing.
Franklin Covey currently uses all five buildings. It would pay the buyer triple-net rents ranging from $9/sf to $12/sf. The buildings, which range in size from 25,000 sf to 159,000 sf, were built from 1984 to 1995. Sphere: Related Content
Franklin Covey currently uses all five buildings. It would pay the buyer triple-net rents ranging from $9/sf to $12/sf. The buildings, which range in size from 25,000 sf to 159,000 sf, were built from 1984 to 1995. Sphere: Related Content
Thompson Center Leaseback Worth $220 Million to Illinois Taxpayers
Real Estate Alert has revealed that Illinois' Department of Central Management is expected to decide this week whether to hire a broker for its pending offering of the 1 million-sf office building at 100 West Randolph Street in Chicago. So far, the state has received inquiries from Cushman & Wakefield, CB Richard Ellis, Eastdil Realty and Jones Lang LaSalle regarding the potential listing. The property, known as Thompson Center, could fetch up to $220 million. Governor Rod Blagojevich unveiled plans for the sale an leaseback in his budget blueprint for next year to avoid increases in the state sales or income taxes.
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CNL Closes on Former Worldcom HQ in Arlington, VA
Real Estate Alert has reported that Commercial Net Lease Realty closed last week on the former Worldcom headquarters complex in Arlington, Va. The Orlando REIT, which recently announced plans to acquire office and industrial properties to complement its large base of retail properties, won an auction for the 491,000-sf property with a final bid of $142.8 million. Jamestown, the Atlanta syndicator, had previously been the high bidder at $ 133.4 million. Commercial Net Lease plans to spend another $28.9 million on previously scheduled tenant improvements and other costs. The property, at 601-701 South 12th Street, was built in 1982 and had undergone several renovations, most recently in 2000. The U.S. Transportation Security Agency is leasing the entire building through 2014. The sale was supervised by a federal bankruptcy court, which was advised by Hilco Real Estate of Northbrook, Ill. NAI/KLNB of McLean, Va., handled marketing.
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Charles Schwab Regional HQ Sells for $196 million
Real Estate Alert recently reported that iStar Financial paid about $196 million, or $330/sf, for Harborside Plaza 10, a 594,000-sf office building in Jersey City, N.J. The 18-story building is fully leased to Charles Schwab through 2017, but the investment bank has subleased more than 40% of its space, and is trying to sublease the rest. The seller was a joint venture between Mack-Cali of Cranford, N.J., and local developer Columbia Development.
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Pension Consultant HQ For Sale in Tacoma, WA
Real Estate Alert reports that a Tacoma, Washington building that serves as the headquarters for investment manager Frank Russell Co. is up for sale. Brokers familiar with the offering say the 211,000-square-foot building, at 909 A Street, could fetch as much as $48 million, or $225/sf. It is net-leased to Frank Russell, a subsidiary of Northwestern Mutual Life, through 2014. The current owner, Stellar International Holdings of Seattle, bought the 12-story property from the Russell family for $29.8 million, or $141/sf, in 1998. Trammell Crow, which represented Stellar in its purchase, is now handling the marketing effort.
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