Saturday, May 22, 2004

Hitachi to Enter Long Term Sublease fo New HQ Campus in San Jose CA

CoStar Web Site - May 13, 2004

Hitachi Global Storage Technologies (Hitachi GST), one of the world's leading suppliers of hard disk drives, struck a deal to relocate its corporate headquarters and research functions to another corporate campus in San Jose, while retaining its development, manufacturing and support operations at the company's current 332-acre campus on Cottle Road.

In one of the largest subleases ever signed in Silicon Valley, the technology firm agreed to a long-term sublease with an option to purchase the entire 21-acre, 367,500-square-foot flex/R&D campus at 3403 Yerba Buena Blvd. in San Jose, CA. Hitachi GST plans to relocate 650 employees from its headquarters and research center to the Yerba Buena campus in late Spring 2005.

Bob Steinbock, Scott Prosser and Mark Schmidt of CB Richard Ellis in San Jose represented the sublessor, Celanese Americas Corp. According to Trammell Crow Co., which was marketing the Yuerba Buena Boulevard campus, it was originally developed by Syntex Corp. at a cost of more than $100 million as the company's preeminent testing lab and is located adjacent to Mission West Properties' and Legacy Partners' campus developments. Sphere: Related Content

Nordea Completes $1 Billion Pan-Nordic Sale-Leaseback Transaction

PRNewswire - May 6, 2004

Cardinal Capital Partners, Inc., a U.S. based real estate investment firm, recently completed the acquisition of a multinational real estate portfolio valued at approximately $1 billion from Nordea Bank and its subsidiaries. The portfolio is comprised of 13 properties located in the central business districts of Stockholm, Sweden; Oslo, Norway; and Helsinki, Finland and encompasses 2 million square feet (192,000 m2) of premiere office and retail properties.

The deal reportedly took a year to complete and featured a 25-year lease for 2 million square feet of CBD office space.
Sphere: Related Content

Wachovia to Enter $547 million Sale Leaseback of 8.2 Million SF Portfolio

SEC Edgar Web Site - May 11, 2004

American Financial Realty Trust today announced that it has signed a contract to acquire a portfolio of 150 properties, totaling approximately 8.2 million square feet, from Wachovia Bank for an aggregate purchase price of approximately $547 million. The portfolio composition includes bank branches and both large and small office buildings. The Company expects to complete the acquisition in the third quarter.

Upon completion of the transaction, the seller will lease approximately 5.0 million square feet in the portfolio for a 20-year term at an annual triple net rental rate equal to approximately 8.5% of the Company's purchase price for the leased space, and will lease an additional 1.1 million square feet of space on a temporary basis for rent equal to operating expenses for the properties. A portion of the portfolio is currently leased to third parties, while the remainder of the portfolio will be acquired vacant.

Within the portfolio, American Financial intends to acquire 24 non-core properties, aggregating approximately 2.0 million square feet, and to immediately commence marketing these properties for sale. Assuming sale of these properties, the seller's occupancy within the portfolio will rise to over 80%. Sphere: Related Content

Bank of America to Enter $546 million Sale Leaseback of 7.5 Million SF Portfolio

SEC Edgar Web Site - May 10, 2004

On May 7, 2004, the American Financial Realty Trust and Bank of America, N.A. entered into a letter of understanding regarding the Company's purchase of a portfolio of 263 properties, aggregating 7.5 million square feet. The portfolio described in the letter of understanding includes 179 bank branches and 84 office buildings, which the Company will purchase for aggregate consideration of approximately $546 million.

The proposed transaction contemplates that the Seller will lease back from the Company approximately 63.5% of the space in the portfolio for a term of 15 or 20 years (at the option of the Seller) at an annual triple net rental rate equal to between approximately 8.4% and 8.55% of the Company's purchase price for the leased
space, depending on the term selected.

The Seller is also expected to occupy an additional approximately 7% of the portfolio for up to 18 months, at an annual rent equal to operating expenses plus $1.00 per square foot. An additional approximately 11% of the portfolio is currently leased to third party tenants, while the remaining approximately 15% of the portfolio will be acquired vacant.

(The properties are believed to be thos acquired by Bank of America in its merger with FleetBoston Financial Corporation.)

American Financial expects to achieve an average annual capitalization rate of approximately 9.25% on the portfolio over the initial 20 year term of the Seller's leases, or approximately 9.0% assuming the Seller selects an initial 15 year lease term.
Sphere: Related Content

Friday, May 21, 2004

Charles Schwab to Sell & Leaseback San Francisco HQ

CoStar Web Site - May 6, 2004

American Financial Realty Trust (NYSE: AFR) said it signed a non-binding letter of intent to acquire a downtown San Francisco office building fully leased to financial advisor Charles Schwab & Co. as well as Schwab's leasehold interests in three suburban office buildings. The agreement covers approximately 823,500 square feet of office space in Northern California.

American Financial said it will buy a 373,500-square-foot, Class-A office building in downtown San Francisco that will be fully leased on a 'bond net' basis by Schwab. American Financial also said it will "assume control over" three office buildings in Northern California totaling approximately 450,000 square feet and currently leased to, but not occupied by, Schwab.

Those buildings are believed to be part of Pleasanton Corporate Commons, a four-building office park developed by Hines on Stoneridge Mall Road, near the intersection of Interstates 580 and 680 in the East Bay community of Pleasanton. Schwab pre-leased the campus from Hines in 2000 with plans to occupy the entire complex. But those plans never materialized as the economy slipped into recession and Schwab initiated several rounds of lay-offs, eventually putting the space up for sublease.

Hines sold the office park to Swiss banker UBS at the end of last year in a sale brokered by Secured Capital Corp. It is believed that Schwab's leases may have been restructured as part of that sale. Prior to the sale, Schwab had two long-term leases for the Pleasanton buildings. One for one building of approximately 150,000 square feet through 2010, and the other for the remaining 446,000 square feet through 2013. Schwab subleased approximately 118,000 square feet in one of the buildings to E-Loan.

Sphere: Related Content

Halifax Bank of Scotland Nearing £150 Million Sale Leaseback of London HQ

Property Week - April 16, 2004

Halifax Bank of Scotland is set to sell its City of London headquarters to Vincent Tchenguiz's new company, just four months after buying the building. Consensus is buying 33 Old Broad Street, EC2, for around £150m with the benefit of a new 35-year leaseback to HBoS.

The 192,000 sq ft (17,837 sq m) building was bought by HBoS from Prudential for around £130m at the end of last year, but the new lease has made it a more valuable investment. The Broad Street deal coincides with a rise in activity in the City investment market. Two large buildings have gone up for sale this week, as some private investors decide to cash in on the huge demand to buy buildings.

Matrix Securities is trying to sell Alban Gate, 125 London Wall, EC2, for around £270m. The move is surprising because Matrix only bought the building in June for around £240m, and private investor syndicates such as Matrix usually hold their investments rather than trade them. CB Richard Ellis is believed to be advising Matrix.

In the second sale, a Malaysian-controlled private family trust has placed 280 Bishopsgate, the London HQ of Royal Bank of Scotland, on the market at £242m. The building was bought in early 2002 for around £220m. FPDSavills is the selling agent.

However, James Crawford, head of City investment at FPDSavills, warned: ‘There is less on the market in the City now than there has been in the last 10 years.' Sphere: Related Content

Soros Buys Five Building Portfolio Occupied By HQ Office Suites

Freeman News - May 11, 2004

Soros Real Estate and Peter Kershaw have bought a portfolio of five buildings from Merrill Lynch Executive Office Partnership for a total of £52.3m. The five buildings were occupied by HQ, the UK's second-largest serviced office provider after Regus.

Kershaw and Soros together bought out HQ's UK business from its US parent after it emerged from Chapter 11 bankruptcy protection last year. The offices are at St James's Square, Mayfair; Bishopsgate, London EC2; Fenchurch Avenue, EC3; Bristol Business Park and Edinburgh Park.

Bank of Scotland provided financing for the deal. Merrill Lynch has also provided funding for five years. HQ has also signed a 13-year lease on its building at Stockley Park. The building is owned by Merrill Lynch Property Fund. HQ currently operates 20 centres in the UK and plans to increase this number to 30 within three years. Sphere: Related Content

Unilever Unit Completes Sale Leaseback of CT Offices

Fairfield County Business Journal - April 12, 2004

Consumer products giant Unilever, as part of its expansion plans in Trumbull, has decided the company might be better off leasing a building it has owned since it was built in the mid-1960s. A deed filed with the town of Trumbull shows that Unilever subsidiary Conopco Inc. sold the 100,000-square-foot structure at 20 and 40 Merritt blvd. to WH-Conn L.L.C. for $21.5 million on Feb. 24. The buyer is a subsidiary of Whiting-Turner Contracting Co. of Baltimore - the company currently constructing the $20 million, 80,000-square-foot expansion to the building Unilever announced in October.

Unilever Home and Personal Care U.S.A. is consolidating units from Greenwich and New Jersey in an expanded five-building campus, adding 600 new jobs and bringing its total employment in Trumbull to about 1,500 people.

The $21.5 million price tag Whiting-Turner paid represents a premium price, real estate brokers said. With the planed expansion, the building would total 180,000 square feet, putting the cost at $119 per square foot.

Sphere: Related Content

Borders Books Completes Sale Leaseback of UK HQ & Flagship Store

Jones Lang LaSalle UK Web Site - April 20, 2004

Borders (UK) Ltd Completes Sale and Leaseback of Charing Cross Road Head Quarters and Flagship Store. Acting on behalf of Borders (UK) Ltd, Jones Lang LaSalle has successfully exchanged and completed contracts on the sale and leaseback of the landmark building at 118-124 Charing Cross Road that houses Borders' head office and flagship superstore.

Knight Frank, acting on behalf of clients of Credit Suisse Asset Management, purchased the property on which Borders (UK) Ltd has signed up to a 20-year lease. The purchase demonstrates the continuing strength of the Central London retail market and more specifically the increased demand for property in Charing Cross Road. Sphere: Related Content

Fidelity to Sell & Leaseback Two Boston Office Buildings - April 30, 2004

Fidelity Investments is putting on the market a significant block of its downtown Boston real estate holdings in a bid to cash in on a hot investment market for fully leased office properties.

The financial services giant plans to sell the 900,000-square-foot 245 Summer St. building, next to South Station, and a much smaller 7 Water St., near Post Office Square, a company spokeswoman confirmed yesterday.

The move is part of an effort, said spokeswoman Anne Crowley, to cash in on sky-high demand by real estate investors for office buildings leased to high-quality corporate tenants. As part of the deal, Fidelity will lease back its space in the former Stone & Webster building - a key factor that would make the 14-story South Station high-rise more valuable to investors, observers say.

Fidelity bought the 1970s era edifice for roughly $190 million in 1999. The financial services giant could get nearly $100 million more for it, noted one real estate executive.

In opting to put the downtown buildings on the block, Fidelity may be eyeing the record, $705 million sale of the recently completed State Street Financial Center. That 1 million square foot tower sold for more than twice its $350 million development cost, largely due to its lease to State Street Corp., observers say.

Fidelity, at the least, could sell 245 Summer for $300 a square foot - or $270 million - with the price going up from there, noted Gary Lemire of CB Richard Ellis/Whittier Partners. It's also expected to lease back space it occupies at 7 Water St. Sphere: Related Content

Morgan Lewis & Bockius Philadelphia HQ For Sale

Philadelphia Business Journal - April 30, 2004

Six Penn Center, home to the prestigious Philadelphia law firm of Morgan Lewis & Bockius is up for sale. The 305,000-square-foot building is fully leased to Morgan Lewis, which made its home there in the fall of 1998 after a controversial move from One Logan Square. There are nearly 10 years left on a 15-year lease of the building.

The building has several owners. Financial services firm Morgan Stanley owns a portion of the property on behalf of pension funds. Pennsylvania Real Estate Investment Trust of Philadelphia is also an owner. Holliday Fenolglio Fowler is marketing the building. The sale price was not set but estimated to reach $60 million.

The 20-story building has a five-story parking garage that can accommodate 194 vehicles. Since the parking deck was once office space, the garage floors can be converted back into office space to allow Morgan Lewis to expand if necessary.
Sphere: Related Content

Saturday, May 08, 2004

Property Consultant DTZ Etimates £40 Billion in UK Property Outsourcing Over Next Five Years

Times Online - May 03, 2004

DTZ, the property consultant, said that companies and public sector organisations sold off more than £20 billion of real estate in the last five years but that this would increase as more businesses opted to cash in on the value of their property assets.

DTZ said that sale and leaseback deals accounted for almost 50 per cent of property outsourcing deals over the last two years. DTZ also expects local authorities and other public sector bodies to sell off more of their property holdings. It estimates that UK local authorities own £110 billion of property, excluding council houses. The property consultant said that councils such as Birmingham and Southwark both have larger property portfolios than some of the major listed UK property companies.

Property experts believe that as many indebted local authorities come under increasing pressure to manage their assets more effectively, they will be tempted to sell off property as way to ease financial pressures. Bradford City Council is one of the first council’s to consider outsourcing its property portfolio. Earlier this year it drew up a shortlist of bidders, including Land Securities, the UK’s largest property company, to own and manage its property portfolio.

DTZ said that 72 per cent of the estimated £3.9 trillion of commercial property in Europe was owned directly by businesses and public sector organisations rather than by property companies or by investors. Sphere: Related Content

Tuesday, May 04, 2004

Commercial Net Lease Realty, Inc. Announces Retirement of President and Chief Operating Officer

BUSINESS WIRE - May 3, 2004

Commercial Net Lease Realty, Inc. (NYSE:NNN), announced today that Gary M. Ralston, President and Chief Operating Officer, has retired effective May 1, 2004. Mr. Ralston has also resigned his position from the company's Board of Directors. Craig Macnab, Chief Executive Officer, has assumed the title of President.

'While it is difficult to leave a company which has been such a big part of my life for almost 15 years, I am grateful for the opportunities I've been presented and proud of the achievements our team has accomplished,' said Mr. Ralston.

'Gary Ralston has been an integral part of the growth of our company from less than $15 million in 1992 to more than $1.25 billion today and we very much appreciate the contributions he has made to Commercial Net Lease Realty,' said James M. Seneff, Jr., Chairman of the Board.

'One of the things that attracted me to Commercial Net Lease Realty was the strong management team and the quality of the balance sheet,' added Craig Macnab, Chief Executive Officer. 'Gary has done a terrific job providing the leadership over the past decade that has brought the company to where it is today.

Futher commentary on the departure of Ralston can be found at the Commercial Property News web site at the link below. Sphere: Related Content

U-Haul Completes $312 Million Sale Leaseback Transaction

PR Newswire - May 4, 2004

Investment firm W. P. Carey & Co. LLC announced today the completion of a $312 million lease transaction involving 78 retail self-storage and truck rental facilities totalling 4 milion square feet in 24 states which operate under the U-Haul brand name. U-Haul used proceeds from the sale-leaseback to pay off their synthetic lease debt.

The properties, totaling approximately four million square feet, were acquired on behalf of Corporate Property Associates 14 Incorporated, (CPA(R):14), Corporate Property Associates 15 Incorporated (CPA(R):15), and Corporate Property Associates 16 -- Global Incorporated (CPA(R):16 -- Global), members of the W. P. Carey Group of income generating, publicly held non-traded real estate investment trusts (REITs).

The facilities are located in 69 cities in 24 states. All 78 locations contain a truck rental facility, and all but one contains a self-storage facility. Under the terms of the two separate bond-type net lease agreements the self-storage facilities will be leased for an initial term of 20 years. The lease can be renewed for two ten-year periods. The truck rental facilities will be leased for an initial term of 10 years. There is also a 20-year management agreement with U-Haul to run both sides of the operation.
Sphere: Related Content

Friday, April 30, 2004

Fidelity Pursuing $270 Million Sale Leaseback of Two Boston Office Buildings

Boston Herald - April 30, 2004

Fidelity Investments is putting on the market a significant block of its downtown Boston real estate holdings in a bid to cash in on a hot investment market for fully leased office properties.

The financial services giant plans to sell the 900,000-square-foot 245 Summer St. building, next to South Station, and a much smaller 7 Water St., near Post Office Square, a company spokeswoman confirmed yesterday.

The move is part of an effort, said spokeswoman Anne Crowley, to cash in on sky-high demand by real estate investors for office buildings leased to high-quality corporate tenants. As part of the deal, Fidelity will lease back its space in the former Stone & Webster building - a key factor that would make the 14-story South Station high-rise more valuable to investors, observers say.

Fidelity bought the 1970s era edifice for roughly $190 million in 1999. The financial services giant could get nearly $100 million more for it, noted one real estate executive.

In opting to put the downtown buildings on the block, Fidelity may be eyeing the record, $705 million sale of the recently completed State Street Financial Center. That 1 million square foot tower sold for more than twice its $350 million development cost, largely due to its lease to State Street Corp., observers say.

Fidelity, at the least, could sell 245 Summer for $300 a square foot - or $270 million - with the price going up from there, noted Gary Lemire of CB Richard Ellis/Whittier Partners. It's also expected to lease back space it occupies at 7 Water St.
Sphere: Related Content

Tuesday, April 20, 2004

American Financial Announces Acquisition of Citigroup Properties

PRNewswire-FirstCall - April 19, 2004

American Financial Realty Trust announced that it has signed agreements to purchase three office buildings to be developed by Koll Development, LLC and net leased by an affiliate of Citigroup, Inc. The three buildings, totaling approximately 531,000 square feet, will be located in Louisville, Kentucky, Greensboro, North Carolina and Boise, Idaho. All three properties are to be developed concurrently and are expected to be completed in the fourth quarter of 2004.

American Financial's purchase price for the three properties will be between $85.6 million and $88.6 million, based upon construction requirements of the lessee, payable upon completion of construction. American Financial will assume no development risk in the transactions, as an affiliate of Citigroup has net leased the properties at a rental rate to be determined as a percentage of the Company's gross purchase price. The Citigroup leases will be for an initial term of 15 years with two five-year renewal options. Citicorp (rated AA- by Standard and Poor's) will guarantee the lessee's obligations under the leases.
Sphere: Related Content

Friday, April 16, 2004

NY Partnership to Acquire Morgan, Lewis and Bockius' DC HQ


Joseph Chetrit, Lloyd Goldman and Jeffrey Feil are the winning bidders for a coveted office at 1111 Pennsylvania Ave. N.W., near the White House, for $160 million. The office is occupied entirely by law firm Morgan, Lewis and Bockius, which has a 15-year lease in place. Fresh off of their plan to buy the Sears Tower for about $835 million from MetLife (REFI, 3/15), the partnership is said to be looking to pay about $450 per square foot for the downtown trophy 356,000-square-foot office, which translates into a low 5.5% capitalization rate.

The building is being marketing by representatives of philanthropist Dr. Lazlo Tauber (REFI, 1/26). It is unclear if all three private investors are involved in the deal or if any other investors are participating. Several calls to Goldman, Feil and Chetrit were not returned. Officials at Eastdil Realty, which is representing Tauber's estate, also did not return a call.

Observers originally believed that the building, known as the Presidential Building, would sell for about $140 million. Its location and the belief that it was a one-of-a-kind property subsequently boosted bidding, said one REIT official German investor KanAm was also in the running for the office, observers said. Officials there did not return a call. Sphere: Related Content

PETCO Funds Acquisition of 20 Stores in Sale Leaseback Deal

Yahoo News / PRNewswire-FirstCall - March 23, 2004

Office Depot, Inc. (NYSE: ODP - News), one of the world's leading sellers of office products, and PETCO Animal Supplies, Inc. (Nasdaq: PETC - News), a leading specialty retailer of premium pet food, supplies and services, announced that they have reached an agreement under which PETCO will acquire 20 former Kids 'R' Us stores from Office Depot for approximately $45 million in cash plus the assumption of lease obligations on leased properties.

The 20 stores -- concentrated in Florida and Ohio, with other locations in Illinois, Kansas, Michigan, North Carolina and New York -- are part of the 124 Kids 'R' Us properties that Office Depot agreed to purchase on March 3. At that time, Office Depot announced its commitment to convert 50-60 Kids 'R' Us stores to Office Depot locations as well as its intention to sell the remaining properties.

James Myers, CEO of PETCO, commented "In addition to enabling us to further penetrate key markets in an efficient manner, the acquisition of the stores will be funded without incurring significant capital outlay, through a sale-leaseback transaction providing traditional store operating lease financing for PETCO."
Sphere: Related Content

Captec Completes Sale Leaseback of 24 Burger King Restaurants in Chicago

Crain's Detroit Business - April 06, 2004

Ann Arbor-based Captec Financial Group Inc. acquired 24 Burger King restaurants in Chicago and the surrounding suburbs from BNB Land Venture Inc. The deal is a sale-leaseback arrangement where Captec owns the properties and leases them to BNB, Ken Milne, senior vice president for Captec, said in a statement. Sphere: Related Content

HealthSouth Lost Millions in Failed Sale Leaseback Deal in 2002

The Birmingham News - April 4, 2004

A failed real-estate partnership involving relatives of former high-ranking executives of HealthSouth Corp. in 2002 ended up costing the Birmingham company more than $16.5 million. The complex deal involved HealthSouth selling 14 facilities to an entity known as First Cambridge-HCI Acquisition LLC, which would lease the facilities back to HealthSouth.

The plan then called for First Cambridge-HCI to sell shares to the public in a deal that bears striking similarities to a HealthSouth spin-off called Capstone Capital Corp. that operated in Birmingham in the mid-1990s.

In December 2001, documents show, UBS arranged an $82.2 million loan for First Cambridge-HCI that was backed by HealthSouth. First Cambridge-HCI used the money to buy 14 health care facilities from HealthSouth, then leased the properties in Texas, California, Florida, Arizona, South Carolina and North Carolina back to the Birmingham company for $9.5 million a year.

HCI intended to establish a total portfolio of approximately 25-30 properties within the first three to six months of 2002 and then conduct an initial public offering through UBS Warburg. For arranging the transaction, HealthSouth paid what UBS a "success fee" of $900,000, plus 1 percent of the loan value. The company also paid the investment bankers $375,000 for servicing the loan during its one-year term.

When Health South came under investigation for other matters, the deal unraveled. To reclaim the properties it had sold to First Cambridge-HCI, HealthSouth paid the company $87.5 million. A year earlier, HealthSouth had sold those same facilities to First Cambridge for $81.5 million, resulting in a loss of $7 million on the loan and repurchasing the facilities. It also paid $9.5 million in rent it otherwise would not have had to pay.

Sphere: Related Content

BentleyForbes Completes $67 Million Acquisition of Five Building Warehouse Portfolio

BUSINESS WIRE - April 16, 2004

Los Angeles-based BentleyForbes has completed the $67 million acquisition of a five building industrial property portfolio. The approximately 1.5 million-square-foot portfolio is 100-percent leased to the North American operating unit of international logistics provider Kuehne & Nagel. The portfolio is comprised of five warehouse facilities in four states, with locations in: Alsip, Ill.; Franklin, Mass.; Forest Park, GA; and two more in Durham, NC.

In the transaction, Bryon Ward of Grubb & Ellis represented both the seller of the five buildings, Loeb Partners Corporation, and the buyer, BentleyForbes. Long-term leases were already in place with Kuehne & Nagel at the time of sale.

Sphere: Related Content

Tuesday, April 06, 2004

Senate Panel Targets Tax Deductions on Existing Foreign Leases - Senate panel targets�tax deductions tied to foreign leases - Apr 6, 2004

American companies that leased foreign dams, bridges and subways stand to lose billions of dollars in tax deductions beginning next year under a proposal advanced by Senate tax writers. The House and Senate have advanced bills effectively blocking future leases, but critics said the Senate Finance Committee's new proposal goes further by penalizing companies that entered legal leases years ago, long before debate erupted on Capitol Hill.

The committee started investigating the lease transactions after an anonymous witness testified to their widespread use last fall. "This scheme is so pervasive that much of the old and new infrastructure throughout Europe has been leased to, and leased back from, American corporations," said the witness. "The sole purpose of this scheme is to generate a tax shelter for U.S. corporations that invest in these schemes."

In the typical lease under scrutiny, a local government leases public infrastructure, such as a bridge built or bought with public funds, to a private company to raise revenue. The private company claims a tax break for the depreciated value of the infrastructure while the local government retains control of it.

U.S. companies hunting for new tax deductions have leased as much as $750 billion worth of bridges, subways and other public works in the United States and abroad over the past four years, according to the Treasury Department. Sphere: Related Content

Shire Pharmaceuticals Opens US HQ in Philadelphia

Shire Pharmaceuticals picks site of U.S. HQ - 2004-03-30 - Philadelphia Business Journal - March 30, 2004

Shire Pharmaceuticals Group PLC, a British pharmaceutical company, signed a 10-year lease at the Chesterbrook Corporate Center in Tredyffrin, Pa. as the site for its new American headquarters. The company has settled on 725 Chesterbrook Blvd., space that once served as the headquarters of another pharmaceutical giant, AstraZeneca, which moved to Delaware. Shire would lease the entire 128,000-square-foot building, according to various real estate sources.

The space will house the company's research and development as well as administrative and marketing departments, said Souheil Salah, a spokesman with Shire. Shire, which last year operated 14 research and manufacturing facilities in the United States and Canada last year, is seeking to reduce that number to four by the end of 2005, Salah said. As part of that process of consolidating its North American operations, the company decided it wanted to open an East Coast headquarters that would eventually have about 300 employees. Salah said that the headquarters will have 150 employees to start out and grow from there.

Founded in 1994 in Hampshire, Chineham, England, Shire focuses primarily on four therapeutic areas: central nervous system disorders, metabolic diseases, cancer and gastroenterology. Shire generated revenue of $1.2 billion last year, up from $1 billion in 2002. Sphere: Related Content

KKR Circling Sainsbury's

The Observer - April 5, 2004

Kohlberg Kravis Roberts, the US leveraged buyout firm dubbed 'barbarians' for the aggressive deal-making that symbolised Wall Street in the Eighties, is stalking beleaguered J Sainsbury. Sources close to the New-York based company confirmed strong interest in an audacious raid on Britain's third biggest supermarket. Last Thursday KKR asked investors for $3bn to finance more European takeovers.

City consensus says that the Sainsbury family, which controls 38 per cent of the shares, would sell, having sucked out more than £100 million in dividends from the company in the last year. 'A bid is going to be a year away. They're in the paddock. They read how much cash has been taken out of the business. They see that the family is a bit wobbly,' said a well-placed source. It is not known whether KKR has made any approaches to the family or other institutional shareholders at this stage.

A bid would have to be pitched above £6 billion. It is likely that Archie Norman, the former Asda boss and a consultant to KKR, would lead new management at Sainsbury's. New owners would sell and lease back its lucrative property portfolio to repay debt and take out cash in dividends.

Sphere: Related Content

Nordea Bank in 775 Million Euro Sale Leaseback of HQ Properties in Sweeden - April 1, 2004

Nordea Bank is close to closing a 775 million Euro sale leaseback / securiization transaction involving four of Nordea Bank’s Scandinavian head office complexes. The four leases will be drafted as a "bondable" triple-net leases with a term of twenty-five years, with three extension options, two of ten years each, and a third of five years. Two of the complexes are in Stockholm and one each in Oslo and Helsinki.

The new lessees will be wholly-owned subsidiaries of Nordea Bank AB (Aa3, P-1), Nordea Bank Norge ASA (Aa3, P-1) and Nordea Bank Finland Abp (Aa3, P-1), respectively. The properties form the main corporate headquarters of the three Nordea Bank Entity parents. The majority of value of the underlying collateral is attributable to the two Stockholm properties. The properties are located in the most prime area of the City and Stockholm is considered the strongest of the Scandinavian Centres, both from a macro-economic and a creditor rights perspective.

Geographic Diversity: [68.4%] Sweden, [13.7%] Finland, [17.9%] Norway based on Moody’s Stabilised Vacant Possession Value. Opening LTV (VP): 190% Moody’s Stabilised Vacant Possession Value. Sphere: Related Content

N. Ireland Govt Considering £1 Billion Sale Leaseback

Telegraph - March 27, 2004

The Government of Northern Ireland is considering an estimated £1billion in a sale and leaseback deal that will see the outsourcing of the management of its entire Northern Ireland estate. The secretary of State for Northern Ireland has been instructed to push ahead with plans to transfer all its freeholds and lease liabilities to a private-sector partner according to property magazine, Estates Gazette .

The estate totals more than 3m sq ft of Northern Ireland Civil Service accommodation and includes the Stormont estate, outside Belfast. Northern Ireland's department of finance and personnel, which is responsible for the project, is appointing financial advisers to finalise a strategy for the estate, which could favour a piecemeal sale of chunks of property. Property outsourcing specialists Mapeley and Land Securities Trilliam are uderstood to be interested in the deal. Sphere: Related Content

Sunday, April 04, 2004

Metro Completes €700 Million Sale Leaseback of 28 Stores in Poland

Globes Online - March 28, 2004

12 Israeli investors are participating in a huge real estate deal, in which Apollo Real Estate Advisors LP and Rida Development Corp. are buying 28 German-owned Metro shopping malls in Poland for €700 million ($860 million). The Israeli investors include Israel Phoenix Assurance (TASE:PHOE1; PHOE5), Hadar Insurance and Profimex (Israel) general manager Elchanan Rosenheim, Apollo Real Estate representative in Israel.

Metro is selling shopping malls with an aggregate space of 600,000 sq.m. in six cities, including Warsaw, Krakow, Poznan, and Lodz. Metro has committed to leasing back most of the space in 20-year contracts, since its hypermarkets anchor most of the shopping malls. The rest of the space is leased to other stores in long-term contracts. The pretax return for the investors, after expenses, will be 19.8%. Some of the malls have land for future building. Metro is one of the largest supermarket chains in the world, with 2,500 supermarkets across Europe.

The €700 million investment in a project of this kind in a single country is above Apollo Real Estate's permitted ceiling as pledged to its investors. The investment was therefore split, with Apollo Real Estate and Rida investing €350 million, and €350 million being invested directly by Apollo Real Estate's investors. The 12 Israeli investors accepted the offer and will invest directly in the project. Sphere: Related Content

Boulder Group Releases Report on Net Lease Restaurant Market

The Boulder Group - April 1, 2004

The Boulder Group has released its most recent quarterly research report on the US net leased investment property market. The report, entitled "The Net Lease Restaurant Market" provides vital statistics on the restaurant segment of the net leased market. As of March 19, 2004, The Boulder Group is tracking 684 available net leased restaurant properties with a combined value of $1.25 billion in 38 states. The restaurant properties included in their survey have a mean selling price of $1,610,000, or $840,000 less than the retail sector as per the The Boulder Group National Report. Additionally, Restaurant Properties mean CAP Rate of 8% is 51 basis points lower than the national retail mean because they are attractive to a larger group of people. The report identified over 100 different restaurant chains that have properties available for sale. Sphere: Related Content

Bankruptcy Court Reclassifies $248 Million in United Airlines Facility Lease Deals as Financings

BUSINESS WIRE - March 31, 2004

Fitch Ratings believes that yesterday's court decisions in the United Airlines' (United) bankruptcy proceedings regarding the treatment of the carrier's special facility bonds sets a troubling precedent which may weaken security provisions behind certain municipal leased-backed bonds, but potentially strengthen bondholder security on other lease structures and provide guidance for structuring future transactions as true leases. The ruling came in response to a motion filed by United in which the airline asked the bankruptcy court to determine if certain special facility bonds issued on the airline's behalf constituted a true lease subject to the provisions of Section 365 of the United States Bankruptcy Code, or instead were 'disguised financings' that should be treated by the court as unsecured debt of the airline.

The case involved five series of bonds issued to construct various facilities for the airline at four airports - Denver International (DEN), Los Angeles International (LAX), San Francisco International (SFO), and New York John F. Kennedy International (JFK) - totaling $510 million. The decision rendered yesterday does not address a second case that remains pending before the bankruptcy court regarding approximately $601.3 million in special facility bonds issued by the City of Chicago for United facilities at O'Hare International Airport.

As a result of this decision, bondholders in these four transactions may rank as unsecured creditors in the bankruptcy proceedings. Recoveries on unsecured claims, which rank near the bottom of the priority list under bankruptcy rules, are determined through the plan of reorganization approved by the bankruptcy court. Historically, recovery for unsecured creditors in airline bankruptcies is well below the value of their claims against the bankrupt's estate. For example, US Airways estimated unsecured creditors would receive stock and warrants in the reorganized company valued between 1.2% and 1.8% of their allowed claims when that airline emerged from bankruptcy in March 2003. However, United will maintain access to the facilities financed by these four transactions, provided it assumes the underlying leases with the airport sponsor.

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Saturday, March 27, 2004

Land Securities Sells London Qualifications Board HQ for £42.5 Million

Freeman News - March 26, 2004

Land Securities has sold its interest in 190 High Holborn to a private investor for £42.5m. The 83,000 sq ft building is let to the London Qualifications Board on a 20-year lease with fixed uplifts every five years. The building generates around £2.52m a year in rent, equating to an initial yield of 5.95%.

LandSec acquired the building, formerly known as Enterprise House, from Compaq back in 2001. The company then undertook a comprehensive refurbishment of the building, which was completed in April 2002. King Sturge acted for LandSec. Velleman & Co represented the purchaser. Sphere: Related Content

Boots Pursuing GBP 1 billion Sale Leaseback of Drug Store Portfolio?

Telegraph - March 27, 2004

UK Retailing giant Boots has warned investors that next year's profits will be hit by a larger-than-expected store investment program and rising pension charges. Boots, which has 1,400 drug stores in the UK, disclosed margins had fallen 30 basis points as the group has struggled to compete against supermarkets.

At their recent press briefing Richard Baker, who has been the chief executive of Boots for six months, refused to dismiss rumours of plans for a GBP 1 billion sale and leaseback of the group's freehold property: "We are not commenting on that at all." Sphere: Related Content

Lexington REIT Acquires Baker Hughes Portfolio for $119.3 Million

PR Newswire - March 25, 2004

Lexington Corporate Properties Trust (NYSE: LXP), a real estate investment trust, today announced that it has acquired four properties in the Houston, Texas area from Dana Commercial Credit Corp for $119.3 million. The properties are net leased to Baker Hughes, Inc. (NYSE: BHI) and are occupied by various subsidiaries of Baker Hughes, Inc. under leases that each have approximately 11.5 years remaining.

The portfolio has a combined total of 1,061,471 square feet of net rentable area consisting of office, research and development and manufacturing space and includes the WesternGeophisical World Headquarters building (Houston, TX), the Hughes Christensen World Headquarters building, the Baker Petrolite World Headquarters building, and the Baker Hughes Worldwide Training/Worldwide Data Facility.

The average annual lease payments during the lease terms are $13.2 million, or 11.1% of the purchase price. The acquired properties are encumbered by non-recourse first mortgages with a current balance of approximately $110.7 million. The mortgage debt bears interest at a fixed rate of 8.04% and matures in September, 2015. Sphere: Related Content

Moody's May Downgrade GBP 431 Million In Sainsbury Leaseback Bonds - March 26, 2004

Moody's Investors Service has placed the A3 rating of the GBP 331,119,309 Secured Bonds due 2023 issued by Highbury Finance B.V. on review for possible downgrade. Moody's also placed the A3 rating of the GBP 100,677,717 Class A Floating Rate Notes due 2023 and the A3 rating of the GBP 30,000,000 Class B Floating Rate Notes due 2023 issued by Dragon Finance B.V. on review for possible downgrade.

The news comes the same day Sainsbury announced it was selling off its US supermarkets business for £1.3bn. The 202 stores, trading as Shaw’s Supermarkets, located in several New England states will be sold to US market rival Albertsons Inc., netting the UK food retailer a post-tax profit of more than £225m.

The rating review is prompted by Moody's decision to review for possible downgrade the A3 rating of J Sainsbury PLC's senior long-term debt. Moody's A3 rating on the Highbury Finance B.V. Secured Bonds is principally based on the strength of Sainsbury as lessee and guarantor.

The Dragon Finance securitisation represents a 23-year sale and leaseback transaction of 10 supermarket sites to Sainsbury, the UK retailer. The Highbury Finance securitisation represents a 23-year sale and leaseback transaction of 16 supermarket sites to Sainsbury. Sphere: Related Content

Tuesday, March 23, 2004

Realty Income to Acquire 112 Circle K Convenience Stores for $100.5 Million


Realty Income Corp. (NYSE:O) announced today that it has signed a definitive agreement to acquire 112 Circle K-branded convenience stores, under long-term, net-lease agreements, from Alimentation Couche-Tard Inc. (Toronto:ATDb.TO), for approximately $100.5 million. It is anticipated that the transaction will close shortly.

Realty Income will acquire the 112 properties under 15 to 17-year, triple-net lease agreements. The stores have, on average, approximately 2,780 leasable square feet and are situated on an average lot size of 1.0 acre. Each location has, on average, 3.4 multi-pump gasoline dispensers and the stores within the acquired property portfolio are seasoned units with an average operating history of 16 years. The average purchase price for each property will be approximately $897,000. The 112 properties are located in 9 states including 41 properties in Florida (primarily Tampa, Orlando, Fort Myers and Naples MSA), 38 in Arizona (primarily Phoenix and Tucson MSA), 8 each in South Carolina and Louisiana, 7 in North Carolina, 3 each in Alabama and Mississippi, and 2 each in Georgia and New Mexico.

The company further disclosed that it plans to hold approximately $92.3 million of the properties in its core portfolio as long-term investments and will place approximately $8.2 million of the properties in its Crest Net Lease Inc. subsidiary for future sale. After the sale of the Crest Net Lease properties, the company anticipates that Alimentation Couche-Tard will generate approximately 4.84% of its annual revenue.

Alimentation Couche-Tard Inc. is the leader in the Canadian convenience store industry and the 4th largest convenience store operator in North America. The company is based in Laval, Quebec, Canada and operates a network of approximately 4,800 stores, of which approximately 2,700 are located in the United States. The company acquired Circle K, including 2,290 U.S. stores, from Conoco Phillips (NYSE:COP) on December 17, 2003. Sphere: Related Content

Former Reebok HQ near Boston Sold for $38.1 Million

The Enterprise at - March 23, 2004

A California investment firm paid $38.1 million for the former Reebok headquarters at 100 Technology Drive. Currently occupied by the Stone & Webster engineering firm, the building was built in 1988 to be the headquarters for sneaker-maker Reebok. Stone & Webster's long-term lease of the entire building made it an attractive investment, said Richard Herlihy, senior director of financial services at Cushman & Wakefield of Massachusetts, which handled the transaction.

Herlihy said the building was on the market for a month and his company received 18 offers from real estate investment firms. The winning bid came from Global Innovation Partners LLC, a California-based private equity investment firm that specializes in technology-related property. The $193-per-square-foot selling price is one of the highest in recent years, Herlihy said. Herlihy said Stone & Webster has 10 years left on its lease.
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Tesco Raises £650 Million in 33 Store Sale Leaseback

The Guardian - March 23, 2004

Tesco yesterday raised more cash for acquisitions by selling off 33 of its UK stores for £650m. The stores, which range in size, have been sold to a joint venture that is half owned by Tesco and real estate firm Topland. Tesco has also sold two distribution centres in the deal. Tesco's £650m cash will come from issuing bond debt, which will be secured on the rent that it will begin to pay for the properties. Tesco will rent the stores on a long leasehold and carry on running the operations, so customers will not see any change.

Topland, run by Israeli-born brothers Sol and Eddie Zakay, has done similar sale and leaseback deals with retailers Marks & Spencer, Littlewoods and Budgens.
Tesco will use the extra cash for expansion in the UK market, where it is the dominant force in retailing, or for more acquisitions overseas.

The supermarket firm raised £773m in January by selling new shares to investors. A small chunk of this cash was used to buy Adminstore, which owns the Europa convenience stores. A source at Tesco said that it could use its combined £1.4bn in cash to buy up some of the 52 Safeway stores that are on the market after its takeover by Wm Morrison. However, the firm is keenly watched by competition regulators as it has such a strong position in the British market. Tesco could also use the cash to convert more of its stores into the large "hypermarket" format where non-food ranges such as clothes, CDs and homewares are sold alongside food.

The 35 properties being sold make up about 5% of Tesco's total property assets. It has done similar sale and leaseback schemes on a smaller scale, including 21 stores with UK property group British Land and two properties with Slough Estates. Sale and leaseback schemes mean a company effectively raises debt but does not have to put it on its balance sheet.

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Italy's Largest Utility Agrees to $1.73 billion Sale Leaseback of Property Portfolio Germany - March 19, 2004

Enel SpA, Italy's biggest utility, agreed to sell most of its real estate holdings to a Deutsche Bank AG-led group for 1.4 billion euros ($1.73 billion) to reduce debt and focus on its electricity and gas businesses. Deutsche Bank, Europe's second-biggest bank by assets, and French money manager CDC Ixis will buy 887 properties, Rome-based Enel said in a faxed statement. Enel expects to record a pretax gain of 200 million euros from the sale.

Enel, Europe's fourth-biggest power producer, has a market value of 37.2 billion euros. Enel debt is rated A1 at Moody's Investors Service and A+ at Standard & Poor's Corp., the fifth-highest level. Both ratings companies have a negative outlook on their rankings. The difference between the yield on the notes and that of similarly dated government debt is 19 basis points, little changed from six months ago.

State-controlled Enel cut the amount of property offered for sale after rejecting a 1.7 billion-euro offer from Deutsche Bank and CDC for all of its real estate holdings, the Italian newspaper MF reported in January. Enel said today it transferred 335 properties valued at 380 million euros to another of its property units. Deutsche Bank and CDC have until April 30 to sign the purchase contract, Enel said. The two companies submitted the only bid for the property in November. Two other potential buyers couldn't agree on the terms under which Enel would rent some of the assets. Pirelli & C. Real Estate SpA, Italy's biggest property manager, has said it may buy some of the assets from Deutsche Bank and CDC for as much as 200 million euros.

CDC is a unit of Caisse des Depots et Consignations, France's biggest financial institution, and manages pension funds for government employees. Deutsche Bank is making the purchase through its DB Real Estate Management unit, Enel said.

Cost Savings

Enel plans to use the cash from the sale to reduce debt, which stood at 24.3 billion euros at the end of last year. The agreement will allow Enel to save 20 million euros a year by cutting debt and interest payments, and renting back some of the properties will reduce maintenance costs. Enel follows Italian companies such as Telecom Italia SpA, the nation's biggest telephone company, and Eni SpA, Europe's fourth-biggest oil producer, in selling property. Buyers have included Pirelli Real Estate and the property funds of Morgan Stanley and Goldman Sachs Group Inc.

Italian Trend

Italian companies have sold property valued at $13.1 billion in the past four years, according to Bloomberg data. Shares of Pirelli Real Estate have advanced 65 percent in the past year, and Beni Stabili SpA, Italy's second-biggest property manager, has climbed 53 percent. A Bloomberg index of 104 European property companies has jumped 61 percent in the period.

Enel and Deutsche Bank formed a property joint venture in 2000, when former Chief Executive Franco Tato was seeking to expand in such areas. Deutsche Bank bought Enel's share of the venture two years later. The Italian utility put its Enel Real Estate unit up for sale in 2002. At the time, the business had a book value of 2.6 billion euros, included a car-rental subsidiary and employed 1,128 people. It had 3 million square meters of industrial real estate and 1.1 million square meters of residential properties.

Citigroup Inc. and Lazard LLC advised Enel on the sale.

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Sunday, March 21, 2004

Babcock & Brown bank seeks Australian listing

CBS MARKETWATCH - March 19, 2004

Babcock & Brown, the leasing and structured finance powerhouse, is reportedly considering an initial public offering within the next 12 months to raise capital to fund its increasing interest in principal investing. Set up in the 1970s by two American tax lawyers, the San Francisco-based bank was a pioneer of leveraged leasing, a method of financing it initially used in the airline industry in particular. Now present in more than 20 countries, it has since established a reputation as a specialist project and structured financing operation.

The listing in Sydney of a niche but well-regarded international financial group would be a coup for the ASX and a boost to government efforts to promote the city as a global financial centre. Only three years ago at the height of the tech boom, Australia was pilloried as an 'old economy' and it feared its capital markets would be marginalised.

Rob Topfer, one of the group's Sydney-based directors, said the bank was considering a listing in Australia, which accounts for up to 30 per cent of its revenues, because its local operations had the greatest need for capital within the group and because the funds would be used to support the expansion internationally of the business model it had developed locally in the past five years.

The bank has increasingly been using its balance sheet to make its own investments. It then either finds partners for the assets or houses them in an investment fund such as Prime Infrastructure, its Australian-listed vehicle.

An IPO will also enable the bank, which operates as a limited partnership and has about 45 directors, to offer share options and a more liquid investment to staff. At present it is 80 per cent owned by staff following the sale of a 20 per cent stake to HypoVereinsbank, the German bank, in 1999, for $120m. Babcock & Brown would become one of only a handful of US-based groups, to list in Australia. With the exception of News Corporation, the US-Australian media giant, the other US companies are mainly small operators in the IT and biotechnology sectors. Sphere: Related Content

Bentley Forbes Acquires US HQ of PHH Arval for $42 Million


BentleyForbes, a Los Angeles-based national commercial real estate investment firm, has completed the $42 million acquisition of the United States Headquarters building for PHH Arval, one of nation's leading vehicle management service companies . The 216,000-square-foot, three-story, Class A office building is a campus-style, build-to-suit development completed in March 2004. BentleyForbes acquired the building at the completion of construction in a net lease acquisition that required the structuring of a long-term lease with the tenant and a sale agreement with the developer.

Located at 940 Ridgebrook Road in Sparks, Md., a township of Baltimore County, the office building is strategically located within easy reach of regional business markets and residential communities including Baltimore, the DC, DE, PA and VA.

BentleyForbes represented itself in the transaction. David Scheffenacker Jr. of Preston Partners, Inc. represented PHH Arval in the lease transaction and the developer, Highland Partners, in the sale. The building was designed and constructed by the project's general contractor, Opus East LLC.

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Friday, March 12, 2004

German Fund Buying Crate & Barrell Distribution Center for $44 Million

Real Estate Alert reports that Deka Immobilienfonds, a German operator of open-end funds has agreed to pay about $44 million, or $65/sf, for a two-building Crate & Barrel Distribution Center complex that breaks ground next month in Cranbury, NJ. The price would bring an initial yield of 6.5%. The property will consist of two distribution buildings, one of which is to include a 9,000-sf factory outlet store, as well as land zoned for an additional 275,000-sf building. Rockefeller Group Development, which is developing the park, is the seller. Sphere: Related Content

Wachovia Flipping Pepco HQ in DC After Long Term Leaseback

Real Estate Alert reports that Wachovia is apparently flipping a single-tenant Washington office building it acquired in September. The bank is reportedly selling the 353,000-square-foot Edison Place at 701 Ninth Street NW to Brookfield Properties of Toronto for about $166 million, or $470/sf. Brookfield's initial annual yield would be about 5.8%.

Wachovia acquired the 10-story property just five months ago for $151 million, or $428/sf, for a cap rate of 6.4%. The seller was Potomac Capital Investment, a unit of Pepco, the Washington-area electric utility. Cassidy & Pinkard brokered the deal. Wachovia is not using a broker with the Brookfield transaction.

The building, which was constructed in 2001, is fully leased to a unit of Pepco, PHI Service, through 2025. It is estimated that PHI pays a triple-net rent of roughly $27/sf. The property consists of 329,000 sf of office space, 24,000 sf of street-level stores, a small amount of storage space and a 416-car underground garage.

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Thursday, March 11, 2004

Spirit Group Agrees to £500m Sale leaseback of 220 UK Pub Portfolio

Freeman News - March 8, 2004

Tom Hunter's West Coast Capital is reported to have teamed up with Prestbury Investment Holdings and HBOS in order to buy a portfolio of 220 freehold pubs from Spirit Group, in a deal worth over £500m. Under the deal, which is expected to be finalised within the next week, the pubs will be let back to Spirit on leases of 30 years. Spirit is understood to be paying an initial rent of around £30m a year, with annual uplifts.

The bidding consortium successfully beat Rotch Property Group to the portfolio, plus a number of UK funds and other investors. Colliers CRE and Lazard are representing Spirit. Spirit became the biggest managed pub chain in the UK when it acquired Scottish & Newcastle Retail for £2.51bn last year. The portfolio for sale represents just 15% of Spirit's total estate, which includes around 2,500 pubs plus a number of restaurants and budget hotels.

Commenting on the deal, a source close to Spirit commented: "It releases cash to Spirit less than six months after it bought S&N. But it also leaves the group with a large amount of fixed assets for a future IPO. The analysts are likely to look favourably on the way Spirit has begun to make the portfolio work for itself." Last week, Spirit officially put its Premier Lodge chain of budget hotels up for sale with a price tag of around £500m. Sphere: Related Content

Willis Group Holdings Signs Long Term Lease for New 420,000 sq ft HQ in London

Freemans News - March 9, 2004

British Land has pre-let its 420,000 sq ft office scheme at 51 Lime Street, London EC3, to the global insurance broker, Willis Group Holdings. Designed by Foster and Partners, 51 Lime Street will be situated opposite the Lloyd's Underwriting Centre. British Land is undertaking the development in partnership with Stanhope, and the scheme is set for completion by the end of 2006 to meet Willis' requirements. Cushman & Wakefield Healey & Baker and DTZ advised British Land. ATIS REAL Weatheralls acted for Willis.

Sphere: Related Content

Rotch Acquires £260 Million Portfolio Net Leased to BAE Systems

Property Week - March 10, 2004

R20, the property investment vehicle of Robert Tchenguiz, announced today it has bought four buildings from Dana Commercial Credit. The purchase price is understood to be £260m. The buildings, adjacent to Farnborough Airport in Surrey, provide 255,000 sq ft (23,690 sq m) of office space, and are let to BAE Systems.

The properties give a combined rental income of $20.7m. At today's exchange rate, this equates to £11.37m, and the deal reflects a net initial yield of 4.4%. Robert Tchenguiz said: "The acquisition continues our strategy of investing in long-term, blue chip cashflows supported by high quality assets with a useful life well beyond expiry of the current leases" Sphere: Related Content

UK Govt Completes £58 Million Sale Leaseback of Courts in Birmingham

Freemans News - March 9, 2004

The Department for Constitutional Affairs has sold the 115-year long lease in Priory Court, Birmingham, to a private investor for £58m. The current owner of the freehold on Priory Court, a private Israeli client of Blandford Goldsmith, has bought the long leasehold interest in the building. The DCA, formerly known as the Lord Chancellor's Department, will lease the building back for 30 years, at a rent of £25.50 per sq ft.

Priory Court comprises 130,000 sq ft of floorspace. The building houses Birmingham's main civil courtrooms, with 11 magistrates courts plus six floors of office space. The purchaser also owns the building next to Priory Court, the 265,000 sq ft Temple Court office block, for which it paid British Land £42m five years ago. Jed Wolfe of Knight Frank, which advised the DCA, said that the sale would enable the government to reinvest the proceeds in public services. Sphere: Related Content

Ashtenne Completes £64.75 Million Sale of 570 houses in UK Net Leased to US Air Force

Property Week - March 8, 2004

Ashtenne has sold its freehold interest in a portfolio of 570 houses at Lakenheath Airbase in Suffolk, currently let to the US Air Force, to a consortium of investors led by Cardiff based Hodge & Co. for £64.75m. The sale represents a profit for Ashtenne of £9.75m, based on a book value of December 2003. Ian Watson, joint chief executive of Ashtenne, said: 'This is a textbook example of what we try to do. We bought this asset with a lease coming to an end within the year as part of a 'job-lot'. We then renewed the lease on excellent terms and have now sold the property to crystallise the very considerable value added. Sphere: Related Content

Carrefour SA Completes 58 Million Euro Sale Leaseback of Office Buildings in France

Industry sources claim that Carrefour SA has sold a portfolio of office buildings to Aerium, a real estate investment consortium, in a leaseback deal for 58 million euro as part of Carrefour's policy of divesting non-strategic real estate. Carrefour has reportedly signed long-term leases with Aerium, and will continue to occupy the sites. Sphere: Related Content

Seattle TV Station KCTS Planning Sale Leaseback of HQ

Seattle Daily Journal of Commerce - March 11, 2004

KCTS Television, one of the most watched stations in the Public Broadcasting System, may sell its headquarters in a leaseback agreement to settle debts and avert legal action by PBS, the head of the station says. 'I think it's the most realistic option we have,' KCTS president William P. Mohler said Tuesday.

Three potential buyers have expressed interest in a deal for the building, located at the Seattle Center and appraised at $13.2 million, and one could make a move in as little as three weeks, Mohler said. A leaseback agreement would allow KCTS to remain in the building and manage $7.2 million in debt, which has mounted over a decade of operating losses. Sphere: Related Content

Luminar Considering Sale and Leaseback of 63 UK Nightclubs

Times Online - March 11, 2004

LUMINAR, the bar and nightclub operator, is considering a sale and leaseback on its estate of about 60 unbranded dancing venues in a move that could presage a share buyback. The group hived off 63 non-core clubs into a separately run division in October in an attempt to improve trading ahead of an eventual disposal. A sale and leaseback would allow it to release cash tied up in the freeholds while continuing to address the issue of performance. Steve Thomas, Luminar's chief executive, said that the turnaround strategy put in place after last year's profit warning, the first since its 1996 flotation, was designed to put the group in a strong enough financial position to consider a range of options. Sphere: Related Content

Wednesday, March 10, 2004

Cesky Telecom Plans €332 Million Property Sale Leaseback

Central & Eastern Europe Telecom Newsletter - March 9, 2004

Cesky Telecom has announced plans to sell and lease back property worth around 11bn kroner (€332m). The sale is the largest in the domestic property market and will be undertaken to assist the company cut costs and mobilise cash flow. No further details are as yet available but a piecemeal approach is apparently possible. The sale process is expected to take one year and to take three to six months to prepare. Sphere: Related Content

Sunday, February 29, 2004

BAE Systems Announces £50m Sale Leaseback Near London

BAE Systems will move all its avionics division from 370,000 sq ft at the Grove in Stanmore, north-west London to a new 200,000 sq ft design-and-build office campus at its 10-acre site at Capability Green in Luton. BAE staff in other divisions at the Grove are moving to locations including Bristol.

Buckingham Securities is the frontrunner in the £50m deal with BAE Systems to buy the new building and lease it to BAE for 21 years at £19 per sq ft. Buckingham Securities is in competition with Active Asset Investment Management, the footballers' fund and others. AIM was in exclusive talks with BAE at the end of last year before a deal fell through. BAE Systems is being represented by ATIS REAL Weatheralls and CB Richard Ellis. Sphere: Related Content

Mizuho Agrees to $2 Billion Sale leaseback of Head Office Buildings

Kyodo News International, Tokyo Knight Ridder/Tribune - February 20, 2004

Japan's biggest bank, Mizuho Financial Group Inc., said on Friday that it would sell its two main branch buildings in downtown Tokyo as part of group-wide cost-cutting initiatives. The group said it planned to securitise and sell the two central Tokyo buildings of its core banking unit, Mizuho Bank, for 217 billion yen ($2 billion), which would result in a 62 billion yen loss on book value.

The group will sell Mizuho Bank's head office building in the Uchisaiwaicho district, formerly the head office of Dai-Ichi Kangyo Bank, to a special-purpose company formed by Dai-ichi Mutual Life Insurance Co. for 105 billion yen ($963 million). The deal will be signed Tuesday for sale to take place March 12.

Mizuho Financial Group will also sell its Otemachi branch building to a special-purpose company of Tokyo Tatemono Co. for 112 billion yen ($1.027 billion) in a deal to be signed and completed next Friday. The building was formerly used for the Fuji Bank head office. The sales are aimed at cutting valuation losses on asset holdings, Mizuho Financial Group said, adding the deals will not affect its earnings outlook for the current business year to March 31.

Both properties will be loaned to Mizuho Bank after the sales, the banking group said. The group was created through the merger of Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of Japan in April 2002. Sphere: Related Content

ChevronTexaco to Buy 1.2 Million SF Enron HQ in Houston, TX - February 26, 2004

The opulent 40-story tower completed by Enron shortly after its collapse will finally be filled. ChevronTexaco Corp. will buy the empty downtown tower as the home for 3,700 Houston employees. The investors who bought it for $102 million at a bankruptcy auction, New York-based Intell Management & Investment Co., said the sale price was not disclosed, but Intell President Gary Barnett said in a release, "Kudos to them for acquiring a trophy building at a fraction of its cost." The gleaming tower was completed shortly after Enron filed for bankruptcy on Dec. 2, 2001.

At the time of the Intell purchase, many said $102 million was less than half of what it would cost Enron to complete the unfinished tower. ChevronTexaco also will get a break from the city: It will pay taxes on the building's $80 million base value, the mayor said. The company is expected to add $45 million in improvements.
When that transfer of jobs is complete, ChevronTexaco will have 5,200 workers in Houston. The purchase is expected to close on March 15.

The buy will allow the company to consolidate many of the different office locations in Houston to downtown. Employees in five buildings throughout the city will move into the tower, company officials said. ChevronTexaco has two other buildings in Houston, on Fournace Place and on Briarpark Drive, which it will continue to use. The new acquisition will provide 1.2 million square feet, which is twice the downtown space ChevronTexaco now occupies. The company plans to sell its Chevron Tower at 1301 McKinney.

Sphere: Related Content

Saturday, February 28, 2004

AMF Bowling Worldwide Pursuing $250 million Sale Leaseback

AMF Bowling Worldwide Website - Richmond, Virginia - February 27, 2004

AMF Bowling Worldwide Inc., the world's largest owner and operator of bowling centers, has been acquired by an affiliate of Hennessy & Simmons LLC, a Chicago-based private equity firm. Fred Hipp has been named President and Chief Executive Officer of AMF Bowling Worldwide, Inc. He joins AMF with thirty years in the hospitality industry, most recently as President and CEO of California Pizza Kitchen.

The merger transaction is valued at approximately $670 million, of which $250 million will be financed through the sale of certain real estate assets under a sale-leaseback facility. Debt financing consists of $135 million in term loans under a new senior secured credit facility, as well as a recently completed offering of $150 million in senior subordinated notes. Finally, a $135 million equity investment was made by Kingpin Holdings, the acquiring affiliate of CHS. Under the terms of the merger agreement, AMF shareholders will receive $25.00 in cash for each common share. Sphere: Related Content

A&P Completes $170 Million Sale Leaseback Transaction

MONTVALE, N.J. - BUSINESS WIRE - February 27, 2004

The Great Atlantic & Pacific Tea Company, Inc. (A&P)(NYSE:GAP) today announced the completion of a real estate sale/leaseback transaction with Cardinal Capital Partners, Inc. (Dallas, Texas). The transaction, executed at a cap rate of approximately 9%, will result in proceeds to A&P of approximately $170 million.

Founded in 1859, A&P was one of the nation's first supermarket chains, and is today among North America's largest. The Company operates more than 645 stores in 10 states, the District of Columbia and Ontario, Canada under the following trade names: A&P, Waldbaum's, The Food Emporium, A&P Super Foodmart, Super Fresh, Farmer Jack, Sav-A-Center, Dominion, The Barn Markets, Food Basics and Ultra Food & Drug. Sphere: Related Content

Monday, February 16, 2004

Specialty Laboratories Announces $47 Million Sale Leaseback of HQ in Valencia, CA

SANTA MONICA, CA - BUSINESS WIRE - February 12, 2004

Specialty Laboratories, Inc. (NYSE:SP) (Specialty), a leading hospital-focused clinical reference laboratory, today announced an agreement for the sale and lease-back of its future headquarters and laboratory facility in Valencia, California, with Lexington Corporate Properties Trust (NYSE:LXP) (Lexington), a real estate investment trust. Under the terms of the agreement, Lexington will purchase the existing facility for $47 million and Specialty will complete the construction project and enter a twenty-year lease for use and occupancy of the facility.

Specialty will receive, net of transaction expenses, more than $24 million at closing of the sale, which is expected before the end of the first quarter 2004. Lease payments are expected to begin in the third quarter and, upon commencement of the lease, Specialty will be required to issue a $9.0 million Letter of Credit. Net of these contributions, Specialty expects to incur capital expenditures of approximately $12 million in 2004 to complete the construction project.

The Sale/Lease-Back transaction is subject to the satisfaction of customary conditions, including a due diligence period, final inspections and closing, each of which is expected to be completed by the end of the first quarter of 2004.

The new 198,000 square-foot facility under construction will consolidate Specialty's business activities within a single building and significantly increase available space for future growth and capacity. The purpose-built laboratory and headquarters building is situated on a 14-acre site located in the Valencia Corporate Park in Valencia, California. Sphere: Related Content

Irish Buyers Pay €40 million for Microsoft Campus near Dublin

The Irish Times - February 11, 2004

A group of property developers led by Dublin businessman Paddy Shovlin has paid Green Property Company almost €40 million for Microsoft's former European operations centre on 12.5 acres at Sandyford, Co Dublin. The investment is currently producing rents of over €2 million per annum but it is expected that the site will eventually be redeveloped for a mixture of retail warehousing and apartments.

The largest of the three office blocks with 10,358 sq m (111,504 sq ft) is occupied by Microsoft at a rent of €1,516,067 per annum. The smallest block with 2,268 sq m (24,423 sq ft) is partially occupied at a rent of €520,000.

Microsoft has six year break options on all the space and it has already moved out of the third block which has a floor area of 7,563 sq m (81,419 sq ft). The general expectation is that Microsoft will also vacate the two other buildings after moving most of its European hub operations to a new six-storey, 16,722 sq m (180,000 sq ft) building at the Green Property's Atrium office development a short distance away in Sandyford.

Green's decision to sell the older complex is hardly surprising given its continuing need to raise capital following its delisting from the stock exchange and also because it was holding more than €120 million in properties occupied by Microsoft.

Green originally paid €72.6 million at the height of the high tech boom in 1999 for the three blocks in Sandyford and another office building in South County Business Park in a sale and leaseback deal with Microsoft. The four investments accounted for 28,334 sq m (305,000 sq ft) of office space in all with the building in South County Business Park accounting for 8,361 sq m (90,000 sq ft).

Both the high tech business and the Dublin office market have taken a nose-dive since then and, with a huge volume of newly completed office space overhanging the market in the Sandyford area, Green had little hope of finding replacement tenants for the older blocks as Microsoft moved out.

New owners Landmark Developments will be taking a long- term view of the Microsoft campus after making a huge success of Beacon Court against all the odds. More than 18,580 sq m (200,000 sq ft) of office and health clinic facilities have been completed and sold at Beacon Court over the past three years at an end value of €95 million.

Landmark is likely to demolish the office buildings when they are vacated and seek planning permission for retail warehousing which is still in constant demand both from Irish and overseas traders. The opening of the Luas service and the completion of the M50 will improve accessibility in Sandyford.

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Rotch Pursuing £247.5 Million Sale Leaseback of Welcome Break Service Stations in UK

London Times Online - February 12, 2004

Robbie Tchenguiz, the multimillionaire property investor, is to buy eight Welcome Break motorway service stations in a deal worth £247.5 million. The sale and leaseback with Mr Tchenguiz's Rotch Property Group is a key plank in a £386.9 million rescue proposal for the roadside operator by Investcorp, the Bahrain-based private equity firm that bought Welcome Break from Granada in 1997 for £476 million.

Under the terms of the deal, proceeds of the sale and leaseback, together with new debt and equity funding, would be used to pay off £345.9 million of company bonds.
Welcome Break, which operates 25 service stations and 21 lodges, became one of the UK’s first “whole business” securitisations after it was acquired by Investcorp. The sites being sold to Mr Tchenguiz are the last eight that remain.
Sphere: Related Content

ABB Pursuing Sale Leaseback of French Property Portfolio

Sweedish engineering group ABB is reportedly having difficulty structuring the sale and leaeback of its French property portfolio because of the sharp decline in its credit ratings. At least one large European bank has reportedly refused to participate in a planned sale and leaseback deal of ABB offices in the Paris region.

The project consisted of selling offices, estimated to be worth up to €100m ($125m), to property investors. ABB has suffered a dramatic deterioration in its credit rating over the past five years with Moody's downgrading its long-term debt on several occasions, from Aa2 in 2000 to B1 more recently.

In June 2002, the group sold $300m of Swedish properties to London & Regional Properties and agreed to lease back 75% of them on a long-term basis. It is reported that similar deals might be under study in other locations. Sphere: Related Content

PricewaterhouseCoopers Plans Office Building in Detroit - February 12, 2004

Accounting firm PricewaterhouseCoopers LLC says it plans to consolidate some 600 metropolitan area employees into a new office building next to Ford Field in the city. The Detroit-Wayne County Stadium authority has approved the project and construction could start in the next few months. Move-in could be in late 2005. The building would be located in an existing parking lot on the east side of the football stadium.

Terms of the transaction have not been disclosed, but similar new projects run in the $15-million to $20-million range. PricewaterhouseCoopers says the new building would be in the 125,000-sf range, probably about five stories.

The move is being forced in part because PricewaterhouseCoopers' current principal metro area office is getting a new occupant. The accounting firm is located in Tower 400 of the Renaissance Center. General Motors, which owns the RenCen, is planning to move its OnStar unit into the corporate headquarters, which prompted PwC to start looking. PwC also rents about 35,000 sf of office space in Bloomfield Hills, which it will vacate when its new Detroit building is ready. The new office building is the first major significant spin-off from Ford Field, which opened as the home of the Detroit Lions two years ago. Sphere: Related Content

Net-Leased Hotels in Philadelphia and Manhattan for Sale - February 13, 2004

The 306-room Sofitel Hotel near Rittenhouse Square and the 398-room Sofitel at 45 West 44th St. in New York's theatre district, are being marketed for sale by New York-based CB Richard Ellis Hotels. Both assets are leased under long-term, bonded, triple-net leases to Miotel Corp., a subsidiary of France-based Accor SA.

The total value of the transaction, including assumption of debt on the properties, is between $175 and $200 million acording to Steven Bardsley of CB Richard Ellis Investment Sales. The sale represents an unprecedented opportunity to own two luxury, class A assets in CBDs in two major cities without having to participate in their respective hospitality operations. The leases run to 2022 and rents are guaranteed by Accor which is an investment-grade firm.

The sellers are a partnership owned by Pitney Bowes (PREFCO) and Finova Capital Corp. The Philadelphia property was a conversion and expansion of the former Philadelphia Stock Exchange building at 120 South 17th St. The New York hotel was newly developed. Sphere: Related Content

Volkswagen Pursuing £300m Sale Leaseback of its UK Property Portfolio

Property Week - February 13, 2004

Volkswagen, the largest car manufacturer in Europe, is working on plans to raise up to £300m through a sale-and-leaseback of its UK property. City sources say that Royal Bank of Scotland is the favourite to buy the portfolio of around 150 car showrooms throughout the country plus VW's head office in Milton Keynes.

In the UK, VW imports and distributes not only its most successful VW Golf series, but also ranges of Audi, Seat and Skoda. The vast majority of its VW, Audi, Seat and Skoda showrooms are owned freehold, but they are leased out to dealers. Those acquainted with the company said it began to sound out potential investors on a property deal in August last year.

At one stage, it explored the possibility of a complete property outsourcing deal with companies such as Mapeley and Land Securities Trillium, but it has now plumped for a sale-and-leaseback instead. Under the terms of the deal it is expected VW would take back the leases owned by dealers and sublet to them.

Experts said VW wanted to raise capital in the UK to show better returns on its burgeoning costs as it invests more capital in the business. The company has invested in a swathe of high-quality dealerships of up to 25,000 sq ft (2,322 sq m) in cities such as Birmingham and Reading. VW has been cashing in on a hot car market in the UK. Sales were higher in 2003 than at any other time since 1988 because of consumer confidence, lower car prices and low interest rates.

It is thought the sale-and-leaseback could be part of a plan by VW in the UK to become more independent of its German parent. Although VW in the UK has done well, the group has been badly hit by the downturn in the global economy. The impact of falling demand led to profits for the first nine months of 2003 slumping 53.7% below the same period in 2002, according to its latest interim report in September. Sphere: Related Content

Thursday, February 05, 2004

Washington Mutual to Build $300 Million HQ Tower in Seattle, WA

Puget Sound Business Journal - January 29, 2004

Washington Mutual Inc. said it has finalized its purchase of the site for its new headquarters building, to be shared with the Seattle Art Museum. The downtown parcel was purchased from the museum and the Museum Development Authority for $18 million, and an adjacent parking garage also was purchased from the development authority for $9.7 million.

The big bank and the museum will begin construction next month on the $300 million project to build and share a new office tower dubbed 'WaMu Center' in downtown Seattle. They hope to be able to move in within two years. The project will allow Washington Mutual to consolidate its far-flung Seattle headquarters operation into one site, and give the museum more space at the same time. The deal has been in the works since early 2002. Washington Mutual said it expects to employ 4,000 to 5,000 staff in the new tower.

The project's Washington Mutual component is 890,000 square feet in a 42-story office tower owned by the bank. The bank's offices will be located on the eastern portion of the site, and will front Second Avenue. The museum's component is made up of 335,000 square feet on 12 full or partial levels The entire project will be built on a six-level underground parking garage owned by the bank, which would accommodate 710 vehicles.

Sphere: Related Content

Tuesday, February 03, 2004

UK's Largest Supermarket Group Evaluating £600 Million Sale Leaseback

Times Online - January 30, 2004

Tesco, the UK's largest supermarket group, is believed to be in talks to sell up to £600 million of property to Topland, the private property group run by Sol Zakay, through a sale and leaseback of its stores. British Land is among the other companies known to have expressed an interest in buying the stores, alongside private property companies such as Rotch. A spokesman for Tesco said that the supermarket had not officially picked a preferred party to buy its stores.

Tesco recently appointed the real estate finance team at Ernst & Young to help it evaluate options for releasing cash from its property, as part of a plan to build a £1.7 billion war- chest to protect its dominant position in the UK market. Property sources said that discussions with Topland were at an early stage but that an official agreement could be reached within two months.

The sale and leaseback deal is expected to involve Tesco selling about 30 stores into a joint venture company. Tesco, which is usually reluctant to sell its freehold properties, has discussed retaining the right to buy back the stores from its joint venture partner in five to seven years. The supermarket chain is keen to raise the money because its balance sheet has recently come under pressure. The company’s financial profile had deteriorated over the past 18 months after a series of debt-funded acquisitions and heavy capital expenditures. Competition in the sector is expected to get tougher this summer, when WM Morrison gains control of Safeway and J Sainsbury introduces price cuts. Sphere: Related Content

UK's Largest Life Asurer Planning £300 Million Sale Leaseback February 1, 2004

Insurance group Aviva is drawing up plans for the sale of the former General Accident headquarters in Perth as part of a £300m sale and leaseback of its property portfolio. The UK's largest life assurer, which trades under the Norwich Union brand, wants to sell and lease back around 50 properties in Perth, York and Norwich out of around 340 properties that it owns. General Accident's former HQ in Perth is one of the buildings which Aviva plans to sell to a property company and then rent back over 20 years. It is understood that three property companies - Land Securities Trillium, Mapeley and London & Regional - were invited to bid for the portfolio, which covers 1.3 million sq ft, in the autumn.

The companies are expected to submit their bids in the coming weeks, and the deal is expected to be concluded within the next two months. By selling and then leasing back its properties, Aviva - formerly CGNU - will raise capital immediately, and retain the buildings it requires. General Accident was based in Perth before merging with Commercial Union in 1998. The firm was renamed CGNU after the acquisition of Norwich Union. Sphere: Related Content

American Financial REIT to Acquire State Street HQ for $705 Million

JENKINTOWN, PA - February 2, 2004 - PRNewswire

American Financial Realty Trust (NYSE: AFR) today announced that it has signed an agreement with a partnership comprised of The State Teachers Retirement System of Ohio, Morgan Stanley Real Estate Funds, The Gale Company and Columbia Plaza Associates to acquire State Street Financial Center, a newly developed, 1.05 million square foot office building in Boston, Massachusetts, which is 100% leased by State Street Corporation under a 20-year lease. AFR will receive additional income from the operations of the parking garage.

State Street Financial Center is a 36-story, Class A+ office building centrally located in Boston's Financial District, just one block from Boston's South Station. It features approximately 1.05 million square foot of office space, including two 75,000 square foot state-of-the-art trading floors, and serves as the headquarters for State Street Corporation, an AA-/Aa3 rated global financial services firm. The property also includes a below-grade, 900-space parking garage.

The acquisition, at a purchase price of approximately $705 million, is scheduled to close within two weeks. The Company will finance the acquisition with available cash and a 20-year secured, fixed rate loan in excess of $500 million with an interest rate of approximately 5.65% to 5.80%.
Sphere: Related Content

Saturday, January 31, 2004

Boeing Mulls Sale Leaseback of Everett WA Property Holdings

The Daily Herald - January 28, 2004

The Boeing Co. has approached the Port of Everett to see whether the public agency would be willing to buy company buildings in Everett and then lease them back. There haven't been any specific discussions, and any deal would not involve the company's massive 98 acre main factory building, said John Mohr, the port's executive director, in acknowledging the discussions.

The sale-leaseback deal would be different from the rumored sale of Boeing's Wichita facilities. But it would fit in with a broader pattern that Boeing has followed in recent years -- reducing the company's real estate holdings. Boeing has been steadily reducing its real estate holdings around Puget Sound, selling land in Kent and consolidating in Renton.

Boeing broached the idea with the port during the 7E7 site selection process, Mohr said. Boeing's 7E7 contract with the state spells out that the property tax breaks the company will get for assembling the new jet in Everett also would apply to any leasehold taxes the company pays in lieu of property taxes, should it decide to sell any buildings and rent them from the port. There haven't been any further discussions since the contract was signed in December, Mohr said. But the port has the authority to make that kind of deal and would be willing as long as the port and company could agree on terms, he said.

The Snohomish County Assessors Office values the factory and the buildings immediately around it at $429.4 million. Boeing's buildings adjacent to Paine Field and its Seaway office center are assessed separately.

A Boeing spokeswoman said it was too early to speculate on whether the company will pursue the leaseback option. Boeing CEO Harry Stonecipher on Tuesday denied that such a sale is being considered. Sphere: Related Content

Government Properties Trust. Announces Pricing of Initial Public Offering

OMAHA, NE - January 27, 2004 - PRNewswire

Government Properties Trust, Inc. (NYSE: GPP), a real estate company that invests in single-tenant properties under long-term leases to the U.S. government, announced today the pricing of an initial public offering of 16,800,000 shares of common stock at $10.00 per share, all of which were offered by Government Properties Trust. The shares will trade on the New York Stock Exchange under the symbol 'GPP.' Friedman, Billings, Ramsey & Co., Inc. acted as the sole book-running lead manager and BB&T Capital Markets and Flagstone Securities, acted as co-managers of the offering.

Total net proceeds from the offering after deducting underwriting discounts and costs associated with the offering were approximately $158.9 million and will be used to repay outstanding indebtedness and to acquire additional properties. Government Properties Trust, Inc. invests in single tenant properties under long-term leases to the U.S. government. Government Properties Trust is a self-managed, self-administered company that will elect to be taxed as a real estate investment trust, or REIT, under the federal tax laws. Sphere: Related Content

German Fund DEGI Buys UK HQ of Baker & McKenzie

Property Week - January 16, 2004

The German fund DEGI is set to pay British Land and West LB's joint venture around £170m for 100 New Bridge Street and Watling House at 33 Cannon Street, both in EC4. DEGI had been in talks to buy the buildings before Christmas but, unusually for a German fund, it walked away from the deal. It is understood that changes in DEGI's key personnel caused the hiatus, but the deal is back on again and the two properties are understood to be under offer. The 165,765 sq ft (15,400 sq m) 100 New Bridge Street is the headquarters of law firm Baker & McKenzie. Last year British Land regeared the lease on the building to make it more attractive to investors. Watling House totals 96,880 sq ft (9,000 sq m). Sphere: Related Content

TJ Hughes Agrees to £19m Sale Leaseback Deal in UK

Property Week - January 23, 2004

TJ Hughes has struck a £19m sale-and-leaseback deal in Liverpool with a private investment house following the £56m management buyout of the business from JJB Sports in November. New owner PPM Ventures, the venture capitalist armof Prudential, and the management team led by chief executive George Foster, have sold the freehold of Hughes House, the group's 207,000 sq ft (19,230 sq m) headquarters, and the adjoining store in London Road, Liverpool, to Dawnay Day for £11.6m.

It has also sold a 175,000 sq ft (16,257 sq m) distribution centre to Dawnay Day in Edge Lane on the outskirts of the city for £7.5m. The first deal represents a yield of 7%. TJ Hughes is leasing back the HQ and store for £825,000 a year. In the second deal, the yield is 7.5%. It will lease the property back for £565,000 a year. The property has been sold to help pay back debt incurred by the new owner when it bought the business from JJB Sports. Halifax Bank of Scotland provided the main finance for the MBO.

TJ Hughes operates a portfolio of 37 stores across the country selling value goods. The largest of them is in Glasgow and measures around 150,000 sq ft (13,935 sq m). Sphere: Related Content

Friday, January 30, 2004

Spirit Finance Completes $360 Million Private Stock Offering For Net Lease REIT


Spirit Finance Corp. announced today the completion of a $360,000,000 private offering of shares of its common stock. The offering was priced at $10.00 per share. A total of 36,000,000 shares were placed. Banc of America Securities LLC. Spirit intends to use the net proceeds of the offering to invest in a diversified portfolio of single tenant, free-standing commercial real estate. The company concurrently closed on a $38 million sale-leaseback transaction with Flying J Inc., the nation's largest operator of interstate travel plazas.

Spirit Finance Corp., headquartered in Scottsdale, Ariz., has elected to be taxed as a real estate investment trust (REIT). The company primarily provides sale-leaseback financing and, to a limited extent, construction, mortgage and equipment loans, to the nation's largest owners of free-standing retail, distribution and service-oriented real estate. The sectors targeted by the company include auto dealerships, auto parts stores and service facilities, beverage distributors, discount retailers, interstate travel plazas, pharmacies, restaurants and supermarkets. Sphere: Related Content

Tuesday, January 27, 2004

Elan Corp. Completes Sale Leaseback of San Diego Offices

San Diego Union Tribune - January 22, 2004

Irish drugmaker Elan Corp. said it sold its San Diego office property, which it will lease back from the new owner, which it wouldn't disclose. Elan, which has its North American biopharmaceutical headquarters in San Diego, said it raised a collective $45 million from the sale of the two-building San Diego campus, as well as the sale of manufacturing businesses in Switzerland and Italy.

The sale of the two office buildings will not affect its employees or day-to-day operations.
Sphere: Related Content

Friday, January 23, 2004

Accor Enters €17 Million Sale Leaseback on Four Ibis Hotels In Spain

Property Week - January 19, 2004

Heron International has completed a €17 million purchase and leaseback of four Ibis hotels from French hotel group Accor. Two of the hotels are in Madrid, one is in Barcelona and the fourth is in Alicante. All four hotels have been leased back to Accor on 25-year leases. Sphere: Related Content

Xerox Buys Back HQ in Stamford CT at End of Long Term Sale Leaseback

The Stamford Advocate - January 15, 2004

Last month, Xerox closed on the purchase of the 255,000-square-foot world headquarters building that it has occupied at 800 Long Ridge Road since 1978. Xerox, which owns the 25 acres the building is on, sold the structure to Stamfex Associates LP of New York City in 1984 and leased it back under a 20 year lease. Xerox believes buying the headquarters building has more financial benefits right now than leasing. Xerox established a wholly owned subsidiary called STHQ Realty LLC, which purchased the property and is financing the acquisition. Sphere: Related Content

SAVVIS Communications Agrees to $52 million Sale Leaseback Data Centers

ST. LOUIS - BUSINESS WIRE - January 23, 2004

SAVVIS Communications Corporation (NASDAQ: SVVS), a leading global managed IP and managed hosting services provider, today announced that it has been selected to acquire substantially all of the assets of Cable & Wireless USA, Inc. and Cable & Wireless Internet Services, Inc. ('Cable & Wireless America' or 'CWA') for $155 million in cash and assumed liabilities of approximately $12.5 million. CWA, wholly-owned subsidiaries of Cable and Wireless plc (NYSE: CWP; LSE: CW), filed for protection under Chapter 11 of the U.S. Bankruptcy Code in December of 2003 and conducted an auction completed yesterday for its business operations, for which SAVVIS submitted the winning bid.

SAVVIS' shareholders Welsh, Carson, Anderson & Stowe and Constellation Ventures, a Bear Stearns asset management fund, have committed to finance the purchase price and provide ongoing funding to support the acquired assets. In addition, SAVVIS has entered into a Letter of Intent with Du Pont Fabros Interests LLC ('DuPont') pursuant to which SAVVIS will sell its rights to acquire five of the CWA data centers to DuPont for $52 million, and to leaseback those data centers for 15 years. " Sphere: Related Content

Reader's Digest to Seek Sale Leaseback Of Corporate HQ in Chappaqua, NY

Readers Digest Website - January 23, 2004

The Reader's Digest Association, Inc. (NYSE: RDA) Board of Directors today approved a proposal by the company's management to pursue the sale and partial leaseback of its corporate headquarters in Chappaqua, New York. Under the plan, the company intends to offer the facility for sale as part of a leaseback arrangement with a term of at least 20 years. The space retained by the company would be designed to accommodate its current headquarters workforce of about 800 employees. The company plans to retain Cushman & Wakefield to market the facility.

The company currently requires less than half of its available office space, although it pays to maintain the entire facility. The campus has 690,000 square feet of usable space on 114 acres. The company expects that a sale would result in a significant cash transaction, a one-time gain and an ongoing reduction in maintenance and other operating costs beginning in Fiscal 2005. The historic headquarters was built in 1939 and has been home to Reader's Digest for 65 years. Sphere: Related Content

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