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

Wednesday, January 21, 2004

PricewaterhouseCoopers Signs 30-year 800,000 sf Sublease in Manhattan

New York Post Online Edition - January 20, 2004

PricewaterhouseCoopers just signed a jumbo 30-year sublease from CIBC worth nearly $2 billion over the term at 300 Madison Ave. in Manhattan - consolidating the accounting giant's New York headquarters in a single location and getting both CIBC and landlord Brookfield out of jams.

PWC will move into 800,000 square feet at 300 Madison, at 42nd Street. It will occupy floors 11 to 35 of the gleaming new 35-story, 1.1 million-square-foot tower, which Brookfield built for CIBC World Markets. CIBC signed on to anchor 300 Madison in 2000, when investment banking was still hot. Brookfield broke ground on the building in early 2001. Then, one year ago, CIBC told Brookfield it would use less than a third of the tower - but it agreed to serve as CIBC's broker in unloading the rest of its space.

Industry sources said the PWC sublease rent starts in the $60s per square foot. The rent CIBC is paying could not be determined. The tower, located one block from Grand Central Station, will now be known as PricewaterhouseCoopers Center.
Sphere: Related Content

Arizona Considering $128 Million Sale Leaseback of State Owned Buildings

Arizona Capitol Times - January 19,2004

Arizona's Governor Napolitano is proposing that the state sell $128 million in state buildings on leaseback arrangements to make the fiscal 2005 payment of the recent Ladewig tax refund settlement. The proposal is part of the governor's recommendations released Jan. 15 for the state to spend more than $7.2 billion from the general fund. The governor's recommendations carry a potential revenue shortfall of $310 million. The governor also proposes using revenue bonds for completing deficiency corrections work on state schools and building prisons and using lease-to-own agreements to build new schools. Sphere: Related Content

TRW Automotive Enters £40 Million Sale Leaseback in UK

Evening Mail - January 19, 2004

The TRW Automotive has entered into a £40 million-plus dealsale leaseback of their site in Shirley, Solihull in the West Midlands industrial heartland of the UK with Opus Land and Frontier Estates. The car parts firm has agreed to lease back of its premises for a 17-year term. The former Lucas site on the A34 Stratford Road includes 180,000 sq ft of office space, along with 25 acres of development land. Opus and their local development partner plan to create a prime business park at the site on the additional land. Sphere: Related Content

Highwoods Signs Build-to-Suit for New $26.6 Million FBI HQ in Tampa, FL

Tampa Bay Online - January 15, 2004

Highwoods Properties, a real estate investment trust based in Raleigh, N.C., has entered into a 15-year lease with the U.S. General Services Administration for the construction of a $26.6 million office complex for the FBI in Tampa, Florida. The 112,000-square-foot, four-story building will be constructed on 6 1/3 acres of land and includes a three-story parking deck. Construction is set to begin in April or May, and the building will take a year to 14 months to complete.

The FBI building is Highwoods' first local project for the federal government. In Atlanta, the company built a 100,800-square-foot building last year to lease to the Centers for Disease Control and Prevention, and it is building a 350,000-square-foot office that it will lease to the National Archives & Records Administration.

Sphere: Related Content

Lexington JV Acquires Michaels Stores Warehouse for $28.6 Million

NEW YORK, January 15, 2004 /PRNewswire

Lexington Corporate Properties Trust (LXP) , a real estate investment trust, today announced that one of its joint venture investment programs has acquired a distribution facility in New Lenox, Illinois. The purchase price was $28.6 million.

The property, a 693,000 square foot distribution facility on 45 acres, is net leased to Michaels Stores Procurement Company, Inc. for twenty years. The obligations of the tenant under the lease are guaranteed by Michaels Stores, Inc. In connection with the acquisition, the joint venture has arranged for non-recourse mortgage financing of approximately $17.4 million. The loan, expected to close in February 2004 will bear interest at a fixed interest rate of 5.51% and mature in ten years. Sphere: Related Content

The Boulder Group Releases Net Lease Market Statistics

Retail Traffic Magazine - January 1, 2004

Research conducted by Jeff Rothbart, an attorney and research director at The Boulder Group, reveals that the number of available net leased properties of all types in the U.S. has reached a ten-year low. Many net lease investors think that the inventory is at least two years away from catching up with the demand. Once the sluggish economy fully turns the corner, development activity will increase and only then can the market equalize.

As of November 2003, The Boulder Group tracked 3,198 net leased properties with a combined value of $11.2 billion. The total U.S. market is estimated at about $20 billion a year. Of those company's followed by Boulder, 1,872 properties, or 59 percent of the sample, are retail, accounting for $4.3 billion, or 38 percent of the total. This disproportionate share of properties to value is due to retail properties having the lowest median selling price, $1.47 million, in the net leased market. More than 75 percent of all retail properties are either free-standing buildings or restaurants, both of which are typically net leased. This figure that should rise to 80 percent in coming years.

Mr Rothbart reports that there are significantly fewer high-yield opportunities in the retail sector than in the office or industrial sectors. In the retail sector, properties over $6 million have an average CAP rate of 7.52 percent, far lower than the 8.7 percent for similarly priced properties in the industrial sector and 8.55 percent in the office sector. About 75 percent of available retail properties cost less than $3 million. Only 1.6 percent cost more than $10 million — representing less than 1 percent of the entire net lease market. This is significantly less than that for the industrial and office sectors, which represent 2.4 percent and 3.4 percent respectively.

In retail, the most sought-out properties are those retailers with investment grade credit ratings — those with a Standard & Poor's rating of BBB or higher. Walgreens, Home Depot, CVS, Wal-Mart, Lowe's, Costco, Kohl's and Sam's Club are examples. But many investors are still interested in borderline credit tenants such as Bed, Bath & Beyond, Albertsons, Eckerd, Staples, Toys “R” Us, and Best Buy. Moreover, investors remain interested in corporate-backed restaurant properties, which comprise almost 25 percent of the available retail net lease properties.

The states of Georgia, Arizona, Florida, California and Texas offer the greatest number of available properties, or 56.3 percent of those tracked by Boulder. This trend can be attributed to high levels of new construction commensurate with the strong population growth. Currently, the more difficult states in which to locate investment properties are in the Northeast. New York, New Jersey, Michigan, Pennsylvania and Massachusetts have the least number of net lease opportunities which have only 2.7 percent of the available net leased properties on the market. Sphere: Related Content

Sunday, January 18, 2004

Tesco to Raise up to £800 Million in Sale Leasebacks on its Property Portfolio

The Herald - January 14 2004

SHARES in Tesco slipped 4% yesterday after the UK's largest supermarket chain announced a series of new initiatives, including a stock issue, that will raise about Pounds 1.6bn to bolster its war chest for expansion. At the same time, the group reported roaring results in a trading update for the Christmas period, with UK like-for-like sales in the seven weeks to January 3 rising 7.5% - its 16th month of accelerating growth.

The group's shares yesterday dipped 10.5p to close at 247.75p – largely because of investor reaction to the dilutive effect of 315 million new Tesco shares hitting the market. The company, which commands a 27% share of the UK grocery market, also said it expects to raise another £800m through "better managing working capital" and a number of sale-and-leasebacks on its property portfolio.
Sphere: Related Content

Spirit to Sell & Leaseback 300 Pubs in UK for Pounds 600 Million

Evening Standard - January 18, 2004

SPIRIT, the UK's largest managed pub company, is putting 300 pubs up for sale in a deal that could net �600 million and pave the way for a stock market flotation. The company, headed by Karen Jones, has instructed investment bank Lazards and property consultant Colliers CRE to sound out potential buyers for part of its estate. Details of the sale are expected to be circulated in a couple of weeks' time but several potential buyers are understood to have already approached the company. Spirit will continue to operate the pubs, which it will lease back from the new owners.

Some of the pubs being sold came with Spirit's £2.5 billion purchase of Scottish & Newcastle's estate two months ago. Spirit's main backer, venture capital company Blackstone, is understood to be keen to float the company in the near future.

Spirit, formerly part of the Punch Taverns group, has 2,470 pubs including Bar Room Bar, Wacky Warehouse and Mr Q's. It is at present considering options for its budget hotel chain, Premier-Lodge, which was acquired as part of the Scottish & Newcastle purchase, but which it is likely to sell on.
Sphere: Related Content

Wednesday, January 14, 2004

Highwoods Properties Awarded 112,000-SF Build-to-Suit For GSA

RALEIGH, N.C.- BUSINESS WIRE - January 14, 2004

Highwoods Properties, Inc. (NYSE: HIW), the largest owner and operator of suburban office properties in the Southeast, today announced that it has been awarded a 112,000-square foot build-to-suit contract with a 15-year lease term by the General Services Administration (GSA) to develop a field office for the Federal Bureau of Investigation in Tampa, Florida. The cost of the project is approximately $26.6 million and includes the purchase of approximately seven acres of land. Construction is expected to commence in the second quarter of 2004.

The building is the second build-to-suit project Highwoods has been awarded by the federal government in the last six months, the first being the 350,000-square foot office and storage facility in Atlanta for the National Archives and Records Administration (NARA). Sphere: Related Content

Monday, January 12, 2004

Nextel Signs Lease for Trizec's One Reston Crescent

CHICAGO - BUSINESS WIRE - January 12, 2004

Trizec Properties, Inc. (NYSE:TRZ - News) announced today that Nextel Communications Inc. (NASDAQ:NXTL - News) has agreed to lease One Reston Crescent, in Reston, Va., for 10 years starting in February 2004. The transaction enables Nextel to conveniently expand its corporate headquarters offices, which are located adjacent to the Trizec-owned property.

The six-story, 184,900 square-foot One Reston Crescent is a state-of-the-art suburban office building featuring the advanced mechanical, electrical and cabling systems required by today's businesses. It is located at the intersection of Reston Parkway and Sunrise Valley Drive, with easy access to the Capital Beltway, the Washington-Dulles Toll Road, Route 28 and the Fairfax County Parkway. Dulles International Airport is five minutes away. In addition, the close proximity to the restaurants and shops of Reston Town Center and the W&OD Regional Trail Park make Reston Crescent an ideal work location in Northern Virginia's high technology corridor.

One Reston Crescent was completed in 2000. Two additional buildings can be built on the master-planned phased development site. Sphere: Related Content

Sunday, January 11, 2004

MG Rover Completes Sale Leaseback of 230 Acre Car Plant

Property Week - January 6, 2004

Regeneration specialist St Modwen has bought 4.25m sq ft (395,000 sq m) of buildings at the MG Rover site in Longbridge for GBP 42.5m m.

St Modwen, which is already regenerating 40 acres (16 ha) of the car plant in partnership with Advantage West Midlands (AWM), paid Pounds 42.5m for the buildings and the surrounding 228 acres (92 ha) of land.

MG Rover has taken the land back on a 35-year lease at Pounds 3.6m a year with annual fixed uplifts and the option to renew on expiry. It will invest the proceeds of the sale in product development. Its operational activities on the land will not be restricted, but provision is made for the release of surplus land at MG Rover's option.

St Modwen executive director Richard Froggatt said it was very similar to a sale-and-leaseback transaction to those they had recently completed with Goodyear, Corus, Alstom, Invensys and others.

St Modwen and AWM submitted a planning application to Birmingham City Council in November to build a £100m business park on 40 acres (16 ha) of surplus land at the site, totalling more than 700,000 sq ft (65,032 sq m) of space. Sphere: Related Content

Saturday, January 10, 2004

New Jersey Natural Gas HQ Sold for $33.7 Million

NEW YORK - January 5, 2004 - PRNewswire-FirstCall

Lexington Corporate Properties Trust (NYSE: LXP), a real estate investment trust, today announced that it has acquired the headquarters of New Jersey Natural Gas Company in Wall Township, N.J. The purchase price was approximately $33.7 million. The property is a three-story, Class-A office facility containing 157,511 square feet on 22.1 acres. The property is leased to New Jersey Natural Gas Company under a net lease which expires June 30, 2021. In connection with the acquisition, Lexington assumed non-recourse first mortgage financing of approximately $27.5 million. The loan bears interest at a fixed rate of 7.32% and matures on January 1, 2021. Sphere: Related Content

Friday, January 09, 2004

Lloyd's Building in London to be Sold for $449 Million

Financial Times - January 8 2004

Shelbourne Development, a privately owned Irish property company is poised to become the new owner of the Lloyd's Building, home of the international insurance market and one of the City of London's best known landmarks, in a deal worth about GBP245m ($449m). The seller, the German investment fund Deka, paid GBP186m for the building in 1996. Deka, which is being advised by FPD Savills and CB Richard Ellis, put the property up for sale in November. Shelbourne, led and majority owned by Garrett Kelleher, a 42-year old Dubliner, is understood to have been one of seven bidders, including Buckingham Securities.

The transaction is one of the largest by an Irish company in the UK market. It follows a trend of recent purchases by Irish developers, who have been looking to the UK and London in particular as their home market has cooled. The last big Irish deal in London was the £246m purchase in 2001 of the former Daily Express building by Green Property and a group of private Irish investors. The Fleet Street building is now the headquarters of Goldman Sachs.

Shelbourne is expected to fund the Lloyd's deal with 80 per cent bank debt. The property is currently let to the Society of Lloyd's under a leaseback arrangement, for a term expiring in February 2031. The building was purpose-built as an insurance marketplace for underwriters and Names - the wealthy individuals who provide capital to underwrite risk in Lloyd's - by Richard Rogers, the award-winning architect. In addition to the main market floor, it has more than 348,000 sq ft of office accommodation, generating rental income of £16.8m a year. This implies a yield of about 6.5 per cent, which compares favourably with other recent transactions in the City.

Mr Kelleher, a schoolboy tennis star, first became involved in the property market doing industrial loft conversions for office and retail in Chicago in the late 1980s and early 1990s. Mr Kelleher's partner is Chris O'Connell, who formerly worked as a corporate finance director at the Bank of Ireland and before that with Kleinwort Benson in London and Frankfurt.
Sphere: Related Content

Friday, January 02, 2004

CVS Completes $307.6 Million Financing of 102 Store Sale Leaseback

Commercial Mortgage Alert recently reported that Credit Suisse First Boston and Wachovia had priced $307.6 million of bonds backed by mortgages and leases on 102 newly constructed CVS stores in 22 states. The deal's single class, which has a 13.2-year average life, was priced to yield 158 bp over Treasuries. The notes were rated A2/A by Moody's and S&P, in line with CVS' senior unsecured debt rating. The Woonsocket, R.I., drugstore chain had floated four previous CMBS deals to refinance debt from its aggressive construction program. The previous deal, a $127.5 million offering in September, priced to yield 170 bp over Treasuries. Sphere: Related Content

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