Friday, February 10, 2006

Goody's Completes Sale Leaseback of HQ & Distribution Centers

Commercial Property News - February 10, 2006

The two investment firms that purchased Goody's Family Clothing Inc. for $327 million last month have carried out a sale-leaseback of three Goody's buildings to help fund the equity portion of the acquisition. The proceeds of the sale and leaseback were not disclosed.

Under the terms of the sale and leaseback, the investment firms--Prentice Capital Management L.F. and Affiliates and GMM Capital L.L.C.--sold the buildings to STAG Capital Partners, and then leased it back.

According to industry observers contacted today by CPN, investment firms that acquire companies often sell and leaseback property and then use the proceeds to reduce the amount of equity that the investment firm would otherwise have to supply to the transaction. The technique can significantly increase return on the deal.

The property includes Goody's corporate headquarters building and main distribution center in Knoxville, Tenn., and a second distribution center in Russellville, Ark. The three buildings encompass approximately 750,000 square feet. Sphere: Related Content

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