Thursday, June 29, 2006

JP Morgan Offices in Dublin For Sale

Irish Times - June 28, 2006

The EBS Building Society is to offload an office block with tax breaks in the heart of the The International Financial Services Centre in Dublin which is let to JP Morgan Bank. The 10-year-old block, 1 George's Dock, is expected to make between €45 million and €50 million when it is goes to tender on July 31st.

The five-storey over basement building is rented by JP Morgan Bank (Ireland) Ltd under a 25-year lease with another 15 years to run. The overall rent for the 3,926sq m (42,255sq ft) block and 46 car-parking spaces is €2,243,627. However, JP Morgan only pays 80.44 per cent of the full rent, equating to almost €2 million per annum. That works out at €509 per sq m (€47.33 per sq ft) - a relatively strong rent considering that it was last set in December, 2001. Sphere: Related Content

Wednesday, June 28, 2006

Hilton Hotel Portfolio With Long Term Leases to Fetch £500 Million

Estates Gazette reports that Vincent Tchenguiz's Consensus and hotel investor the Farnsworth Group are seeking a buyer for a £500m portfolio of 10 Hilton hotels in the UK. The pair stand to earn a profit of up to £170 million on the portfolio which was acquired in a 27-year sale leaseback transaction with Hilton June 2002. Sphere: Related Content

Citizens Bank Agrees to $323 Million Sale Leaseback of 241 Branches

The Providence Journal - June 27, 2006

A Pennsylvania-based real estate investment trust has struck a deal to buy 241 bank branches from Citizens Financial Group for $323 million and then lease back the locations to Citizens. American Financial Realty Trust of Jenkintown, Pa., said it expects to complete the purchases this month and early next month.

This is at least the fourth deal Citizens has struck with the company, American Financial spokesman Anthony J. DeFazio said. "Banks in general are realizing more and more it's more profitable for them to lease than to own real estate," DeFazio said. Last October, American Financial paid $60.2 million to buy Citizens' headquarters building in downtown Providence. Citizens, in turn, signed a 10-year lease with the buyer.

DeFazio said his company, which announced the deal in a statement Friday, would not disclose the location of the 241 branches involved in this latest deal until the purchases are completed. They include branches of Citizens Bank and Citizens' Midwest subsidiary, Charter One Bank.

American Financial Realty will acquire the Citizens and Charter One branches in a joint venture with Dillon Real Capital Management LLC. Sphere: Related Content

Monday, June 26, 2006

The Paramount Group Acquires SFX HQ in Manhattan

Commercial Real Estate News - June 21, 2006

completed its deal to buy the Candler Tower at 220 West 42nd Street. The 24-story Class A office and retail property has 227,685 sf and is located on the south side of 42nd between 7th and 8th Avenues between Disney’s New Amsterdam Theatre and Madam Tussaud’s Wax Museum.

W. P. Carey & Co. negotiated the sale on behalf of two of its non-traded REIT affiliates, Corporate Property Associates 14 and Corporate Property Associates 15, that jointly owned the property.

The entire Candler Tower is triple-net leased to the entertainment conglomerate SFX. The SFX lease is guaranteed by Clear Channel Communications and expires September 2020. The retail is sublet to McDonald’s and is one of the chain’s highest grossing units. McDonald’s recently invested more than $13 million in improvements to the first three floors of the property, two of which are the restaurant space.

The building is named for Asa Candler, a wholesale druggist who purchased the Coca-Cola formula for $2,300 in 1887 and invested his company’s early profits in real estate, building Candler Tower in 1912. Designed in late Gothic and early Renaissance style by architectural firm Willauercar, Shape & Bready, the property was once the tallest structure in Midtown. It is one of the last remaining white terra-cotta skyscrapers in the city and was restored to its original grandeur in the mid 1990s through a $35-million capital improvement program. Sphere: Related Content

Esporta Pursuing £300 Million Sale Leaseback of UK Racket Clubs

The Sunday Times - June 25, 2006

The upmarket health-clubs company Esporta is in talks to sell its freehold property assets for more than £300m. The group is believed to have received a number of unsolicited approaches about a possible sale-and-leaseback of its racket clubs. It has asked its regular adviser Citigroup to handle the inquiries.

The current favourite to clinch a deal is Maple Leaf, the privately owned property vehicle of the Landesberg family, best known for their involvement with Admiral Taverns, a pub company. Other parties thought to be interested in the Esporta clubs include Robert Tchenguiz, the property tycoon, and London & Regional, the real-estate group that recently acquired Esporta’s rival Next Generation.

A sale would also mean that the company’s main backer, the private-equity firm Duke Street Capital, would get back the money it has invested in the business and would leave it owning the operating business, in effect, for free.

The decision to explore a property deal is thought to have been taken after the auction of Next Generation, which raised £200m. Esporta was an under-bidder on that deal and also lost out last week in the sale of The Club Company, owner of a string of golf and country clubs. Sphere: Related Content

Sunday, June 25, 2006

Estée Lauder Signs $18 Million Build-to-Suit for Distribution Center near Philadelphia

Philadelphia Business Journal - June 23, 2006

Opus East will construct an $18 million, 242,433-square-foot distribution building for Estée Lauder Cos. Inc. in the Keystone Industrial Park II in Bristol, Pa. Estée Lauder (NYSE: ES), the cosmetics maker, signed a 20-year lease with Opus East, a regional operation of the Minnesota-based Opus Group that has an office in Plymouth Meeting, Pa.

Opus East has already broken ground on the facility at 200 Crossings Drive and expects the company to move in next March. Estée Lauder of New York already occupies 302,409 square feet in the industrial park in Bucks County. It has been in that space since March 2001. Opus East and Colliers Lanard & Axilbund arranged the lease. Sphere: Related Content

Saturday, June 24, 2006

JFR Global Investments Acquires $245 Million Portfolio of Single Tenant Properties - June 22, 2006

In what may be one of the largest such transactions of its kind, New York-based JFR Global Investments has bought about 3.6 million square feet of office and industry buildings comprised entirely of net-leased, single-tenant properties assembled one at a time and sold as a portfolio. The seller, a private investment group, was asking $245 million for the buildings, though the final price wasn’t disclosed. (believed to be Stag Capital)

All together there are five office and 17 industrial properties in the portfolio. The weighted average lease term is nearly ten years across the portfolio, which is also geographically diverse, spanning 17 states. The average size per property is 175,000 square feet. Notable tenants included Apria Healthcare, Bausch & Lomb, GlaxoSmithKline, West Marine and Xerox Corp. Sphere: Related Content

Friday, June 23, 2006

Boustead Holdings Pursuing $155 Million Sale Leaseback of Oil Palm Estates

TheEdge Daily - June 21, 2006

Kuala Lumpur based Boustead Holdings Bhd is setting up an Islamic real estate investment trust (I-REIT) to be listed on the Main Board involving some of its oil palm estates and mills with a total value of up to RM570 million ($155 million.)

In a statement on June 21, Boustead said its subsidiary Boustead Properties Bhd's portion of the assets to be disposed of for the REIT would amount to about RM330 million.

“The Proposed Boustead I-REIT will enable the group to realise the fair value of its investments in the plantation assets while retaining productive use of the assets by way of the proposed leaseback arrangement,” he said.

Boustead said it would also allow the group to participate in the local real estate investment market through its proposed holdings in the units and its involvement in the management of the Boustead I-REIT.

Affin Bank Bhd and Pacific Alliance Capital Sdn Bhd have been mandated by Boustead to act as Joint Advisers for the proposed REIT. Sphere: Related Content

Friday, June 16, 2006

Woolworths Closes $846 Million Sale Leaseback of 11 Distribution Centers In Australia

The Australian - June 15, 2006:

In Australia's biggest industrial property sale, unlisted funds managed by SAITeysMcMahon and Lend Lease have paid a combined $846 million to buy Woolworths's prime portfolio of 11 distribution centres around the country. The new, purpose-built centres will be leased back to Woolworths for 15 to 17 years.

Under Woolworths's sale terms a price was fixed for the assets and parties were asked to "rent bid" the 630,000sqm portfolio, effectively by offering the lowest rent.

In a sale handled by merchant bank Grant Samuel, SAITeysMcMahon and the Lend Lease-managed Australia Prime Property Fund are believed to have offered rents equating to a 6.3 percent income yield overall, beating shortlisted parties the ALE Property Group and Westpac Office Trust. Woolworths would not specify the overall yield yesterday, saying it was "sub 6.5 percent", implying annual rent on the centres of less than $55 million.

SAITeysMcMahon acquired the biggest chunk in what chief executive David Hinde admitted was a "huge step up" for the fund manager, which largely distributes its product to retail investors through financial planners. SAITeysMcMahon bought eight of the centres, with a combined 430,000sqm of space, for a total of $623 million.

The properties will be maintained and repaired by Woolworths under the lease terms, although a joint venture between SAITeysMcMahon and the Lend Lease-managed Australia Prime Property Fund would be responsible for structural and capital expenditure works. Outgoing chief executive Roger Corbett said the deal gave Woolworths flexibility to alter and adapt the centres to meet changing operation requirements over time and was a "good outcome for all parties".

APPF acquired the three remaining centres, totalling about 200,000sqm, for $223 million, again without specifying which centres or other purchase details, lifting the value of its industrial portfolio to $491 million.

Woolworths is close to finalising a consolidation of its distribution centre network from 30 to 11, part of the Project Refresh cost-reduction program which has cut overheads by $3.6 billion over the past six years. Sphere: Related Content

Hospira Signs Build to Suit for Office Building Near Chicago HQ

Crain's Chicago Business - June 14, 2006

Lake Forest-based Hospira Inc. has signed a long-term lease for a proposed 102,700-square-foot-office building to be developed by Duke Realty Corp. near the hospital products maker's headquarters in the Conway Park development, according to people familiar with the transaction.

As part of the deal, Duke is likely to expand the building to more than 135,000 square feet, adding a lower-level to the three-story structure that Hospira would use in part for a data center, sources say. Duke edged out rival developer Opus North Corp. of Rosemont, which has been vying for Hospira with an office building proposal of its own at a nearby site.

Daniel McCarthy of Chicago real estate firm Jones Lang LaSalle Inc., which represents Hospira, confirms that a lease had been signed, but declines further comment. Steve Schnur, senior vice president in local office of Indianapolis-based Duke, declines comment.

Hospira, a 2004 spin-off from Abbott Laboratories, is outgrowing its existing building at 275 N. Field Drive in Conway Park.

Called the Cadence at Conway Park, the building is expected to be completed next summer. A Hospira representative could not be reached for comment. Sphere: Related Content

Wednesday, June 14, 2006

Italian Government Completes €398 Million Sale Leaseback of 75 Property Portfolio

Standard & Poor's Web Site - June 12, 2006

Standard & Poor's has issued a presale report on Patrimonio Uno CMBS S.r.l., a €398 million asset-backed floating-rate notes transaction backed by a senior loan originated by Banca Intesa SpA, Banca Nazionale del Lavoro SpA (BNL), and Morgan Stanley Bank International Ltd. in December 2005. The purpose of the loan was to finance the acquisition of 75 commercial properties in Italy, 53 office buildings and 12 police training centers, from the Italian Ministry of Economy and Finance (MEF) and other public entities. Of the acquisition price, 60% was funded by the loan, while the balance was funded through equity, via the issuance of fund units that have been sold to institutional investors.

The underlying portfolio securing this transaction can be divided into two distinct groups: portfolio A and portfolio B. The portfolio A properties comprise assets that are subject to a lease agreement entered into between the fund and Agenzia del Demanio (ADD). ADD has subsequently assigned the use of the properties to other government entities. Portfolio B comprises properties leased to a mixture of public and private tenants.

The term of the lease to ADD (75% by rental income) is for nine years, expiring in December 2014, with a lease extension on an all-or-nothing basis for the properties included within portfolio A for a further nine years. The term of the loan/note issuance is for 12 years, with a potential extension for a further three years. Standard & Poor's has considered the likelihood of ADD vacating all properties on expiry of the first lease term, and is comfortable that there are sufficient incentives in the ADD lease agreement to ensure the lease will be renewed for a further nine years.

At closing, the aggregate of rents received will amount to €45.192 million, €33.650 million from portfolio A and €11.542 million from portfolio B. Under the ADD lease agreement, rent will be paid semiannually in arrears on the 15th day of June and December. The contracted rent will increase yearly by 75% of the ISTAT (consumer price index) from the beginning of the second year of the lease.

This is a "sell-down" portfolio and it is anticipated that the loan balance, and the notes outstanding, will reduce as the properties are sold. Sales are expected to start from the beginning of 2008 onwards. In general, portfolio A properties are assumed to be sold only after the eighth year from closing, which is after the portfolio A tenant's lease agreement has expired in December 2014.

Standard & Poor's has been able to de-link the rating on the tenant by focusing on the assets and their ability to generate income over the life of the notes, and through refinance from current or subsequent tenants. Sphere: Related Content

Friday, June 09, 2006

BMC Software Agrees to $295 Million Sale Leaseback of Houston Headquarters

Comercial Real Estate News - June 8, 2006

TPG/CalSTRS LLC, a joint venture between the Thomas Properties Group and the California State Teachers' Retirement System, has agreed to terms with BMC Software Inc., to purchase the company's four-building, 1.5 million-square-foot campus, as well as 24 acres of adjacent developable land.

The property, located in Houston's Westchase District, was awarded the 2004 BOMA Office Building of the Year Award, and has served as BMC's headquarters since its construction in 1993. A leading provider of enterprise management software solutions, BMC will remain headquartered at the facility under the terms of a 15-year lease for 621,000 square feet (42 percent of the overall campus space) signed as part of the deal.

Two thirds of the $295 million purchase price will be funded by first mortgage financing proceeds, with the other third provided by equity, of which Thomas will fund $24.2 million and CalSTRS $72.4 million. Sphere: Related Content

Bank of Ireland to Sell and Leaseback 35 Bank Branches for €300 Million

RTE Business - June 08, 2006

Bank of Ireland has confirmed that following a strategic review of its branch property portfolio, it will sell and leaseback up to 35 of its larger branch locations in September. The bank has 254 branches nationwide.

Bank of Ireland said the proceeds of these sales will be used to strengthen its capital base and to facilitate ongoing growth and investment in the business. The properties will be offered for sale in one or more lots by public tender and CBRE has been appointed as the bank's agents for the project.

Richie Boucher, Chief Executive, Retail Financial Services Ireland says that the bank will enter into long term leases for all of these properties. 'We envisage that we will typically enter 25-year leases, with five rent reviews,' he added. Sphere: Related Content

Barclays Completes £85m Sale Leaseback of 15 High Street Bank Branches

Property Week reports that Prudential Property Investment Managers (PruPIM) is about to pay more than £85 to acquire a portfolio of 15 high street branches from Barclays. The purchase price provides a yield of around 4.3% as the branches are among the best located high streets branches in the UK. PruPIM acquired the portfolio for one of its retail funds and reportedly beat a shortlist of private investors to the portfolio, which was Barclays' first sale and leaseback to be sold outside of auction.

Barclays is preparing to bring another £70m portfolio 25 of high street branches to the market that will be leased back for 20 years with a break at 15. This portfolio is expected to produce a yield of 4.75% reflecting more secondary locations than the previous sale.

The bank is also reportedly selling its 300,000 sq ft Barclaycard headquarters to a UK fund for £75m at a yield of 5.5%. Barclays' offices at Brackmills Industrial Park, Northampton, and its call centre at Gadbrook Park, Cheshire, are also reportedly under agreement with seperate buyers.

Jones Lang LaSalle's portfolio team is advising Barclays which holds more than 10m sq ft (929,000 sq m) of freehold properties across the world and has 1,700 branches in the UK. Sphere: Related Content

Wall Street Journal Reports Sale Leasebacks Gain Favor

A recent article in the Wall Street Journal reports the increasing use of sale leaseback transactions by corporation in Europe, Asia and the US as a way to free up capital to reinvest in their core business. The article cites several recent high profile transactions involving Metro Group AG, Barclays, IBM, Bank of America, Carrefour SA and others. Sphere: Related Content

LNR Property Corp Enters $60 Million Sale Leaseback of Miami HQ

Cityfeet,com - June 07, 2006

New York-based Andalex Group has acquired Lincoln Place, a 140,000-sf class A office building at 1601 Washington Ave. in South Beach. The property is the headquarters of real estate and finance company LNR Property Corp.

Lincoln Place is an eight-story office building designed by Coral Gables-based architect Nichols Brosch Sandoval which was completed in 2002. It contains 111,000 sf of office space, 29,000 sf of retail space and an attached five-story parking garage with more than 500 spaces. Financing for the transaction was provided by Wachovia Securities.

Andalex vice president and CIO Andrew Silverman tells that the building’s location is among reasons the company acquired it. “It’s a fairly new building, class A space, in a good location of South Beach,” Silverman says. LNR has a 15-year lease for the space, but the company believes the strong location will attract tenants over an even longer time period.

The Andalex Group was founded in 1989 and specializes in the acquisition, development, construction management of all property types. The firm’s portfolio includes more than 4.5 million sf of space including the 400,000-sf 101 Avenue of the Americas in Lower Manhattan, Sylvan Corporate Center in Englewood Cliffs, NJ and Arris Lofts in Long Island City, NY. Sphere: Related Content

ING Securitizes EUR 267 Million Loan on Goldman Sachs UK HQ

ING Real Estate announced today it has successfully closed its first collateralised mortgage-backed securities (CMBS) transaction via LEO (UK) CMBS No.1 plc. The GBP 182.75 million (EUR 267.2 million) transaction was arranged and lead-managed by ING Wholesale Banking on behalf of ING Real Estate Finance, which originated the underlying loan. The loan is secured on part of the European headquarters of Goldman Sachs in London.

The issue comprised GBP 100 million (EUR 146.2 million) Class A1 Notes rated AAA/Aaa, GBP 35 million (EUR 51.2 million) Class A2 Notes rated AAA/Aa2 by S&P and Moody’s respectively and GBP 47.75 million (EUR 69.8 million) Class B Notes. The Class A Notes were listed in the Irish Stock Exchange. The unrated and non listed Class B Notes were placed with ING Real Estate Finance UK, London Branch. ING Real Estate Finance will be the servicer of the loan.

The structure was designed to sell-down a significant portion of the loan to third party investors while allowing ING Real Estate to retain a position in the loan via its purchase of the Class B Notes. There was an overwhelming interest from investors, which resulted in tight pricing on the Class A Notes. Sphere: Related Content

Wednesday, June 07, 2006

Good Harbor Fillet Enters Sale Leaseback of HQ Near Boston

Boston Business Journal - June 2, 2006

Angelo Gordon and Co. bought a 68,000-square-foot industrial building from 21 Great Republic Drive LLC for $8 million. The deal is a sale and lease back, in which the seller, a joint venture of the Good Harbor Fillet Co. and a private investment fund based in Los Angeles, will continue to occupy and lease the Gloucester, MA building. Good Harbor Fillet signed a 20-year lease for the building with Angelo Gordon and Co.

The building is at 21-29 Great Republic Drive in Gloucester on 9.6 acres in the Blackburn Industrial Park and is about 30 miles northeast of downtown Boston.

Good Harbor Fillet Co. is a seafood processing company whose clients include Gorton's, the U.S. Food Service, Stop & Shop, the U.S. military and school systems nationwide.

Good Harbor Fillet was advised by Sonnenblick Goldman, a New York-based real estate banking firm, in the transaction. Sphere: Related Content

Tuesday, June 06, 2006

PA Consulting Seeking £175 Million Sale Leaseback of London HQ

The Times Online - June 6, 2006

PA Consulting is to sell its London headquarters at 123 Buckingham Palace Road for more than £175 million as part of a sale-and-leaseback deal, The Times has learned.

The management, systems and technology consulting company has appointed Cushman & Wakefield Healey & Baker, the global property consultant, to market the building in London’s Victoria, which it bought for about £107 million in 1999.

PA Consulting occupies about half of the 194,000 sq ft property. The rest is leased to the Highways Agency, BSkyB and Korn/Ferry International. The sale is designed to cash in on bumper demand to buy commercial property assets. Neil Gorman, head of global real estate at PA Consulting, said that capital from the sale would be reinvested in developing new business in new markets.

PA plans to agree a new 20-year lease on the space that it occupies in the building at a rent of about £50 per sq ft. If the building is sold at the £175 million sale price, that would generate a rental yield of more than 5.25 per cent for the purchaser. Sphere: Related Content

Sunday, June 04, 2006

Royal Bank of Scotland Seeking Sale Leaseback of 250 Bank Brances

Property Week reports that The Royal Bank of Scotland is looking to sell up to 250 properties across the UK.

The portfolio is expected to include freehold and leasehold properties from both high street retail and offices throughout the UK. It will be the second group of properties to be sold and leased back by the bank. It follows the £100m sale last year of 300 properties to Ackerman Group.

The portfolio, which has yet to officially come to the market, is expected to sell for up to £75m and offer 20-year leases. The exact properties to be included in the portfolio have not yet been finalised and is still awaiting board approval.

Ernst & Young, which advised RBS on last year's deal with Ackerman, is said to be advising on this second group of properties. Sphere: Related Content

Saturday, June 03, 2006

Singapore Stock Exchange Exploring Sale Leaseback of Headquarters

Channel News Asia - May 29, 2006

The Singapore Exchange has confirmed it is open to selling its headquarters building and then leasing it back. But it will only do so when market conditions are suitable. It also says any sale won't automatically result in a special payout to shareholders. It may find other possible uses for the money.

SGX was responding to an analyst report by Credit Suisse predicting the exchange will sell its building SGX Centre 1 by year-end. Sphere: Related Content

El Arbol Completes $97 Million Sale Leaseback of 44 Supermarkets in Spain

GE Real Estate Iberia recently closed on a €75 million (U.S.$97 million) sale-leaseback deal with Spanish retailer El Arbol for 44 properties toward the north of Spain. Including 32 high street supermarkets, five convenience stores, three food logistics warehouses, three mixed-use assets and a training center, the deal is the second largest in Spain in the past year, according to GE Real Estate.

"We bought the El Arbol properties at a 6 percent to 6.5 percent yield," Marcelo Horcel, managing director of GE Real Estate Iberia, told CPN. "That yield is very much in line with retail markets in Spain, where yields are still tightening. High street retail in prime areas in Spain yields around 5 percent, and shopping centers around 5.5 percent to 6 percent. El Arbol is either the leader or No. 2 in its markets."

The El Arbol properties GE acquired, which are 97 percent occupied, comprise 72,000 square meters and are located in the Spanish regions of Asturias, Cantabria, Castilla y Leon, Extremadura and Galicia, and are on medium- to long-term leases. Sphere: Related Content

Friday, June 02, 2006

Nortel Seeking Sale Leaseback of Galway Office Complex

One of Galway's leading companies, Nortel, is to embark on a sale and leaseback of most of its office complex at Mervue Business Park in Galway.

Nortel has been based at Mervue since 1973 and operates one of the world's most advanced telecommunications research centres from that location. Roland O'Connell of Hamilton Osborne King, who is handling the property transaction, will not be providing any guide price but investment advisers estimate that the deal should be worth at least €28 million to Nortel.

Nortel has gradually changed its focus from manufacturing to high value global research and development. The company provides international customer sales, operations and finance support across Europe from its Galway base.

The sale and leaseback proposition reflects this progression as Nortel will continue to occupy 8,000sq m (86,112sq ft) of space which will be leased back for a term of 20 years. The rent roll of €1.2 million reflects a rent of €161 per sq m (€15 per sq ft).

The remaining 8,000sq m (86,112sq ft) in the 1973 Nortel building will be sold with vacant possession apart from about 1,200sq m (12,916sq ft) which is let on a short term lease to another company. The sale will also include the modern Lyrr Building, currently sublet, which has a floor area of around 1,858sq m (20,000sq ft). Sphere: Related Content

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