Citibank Awards $139 Million Sale leaseback of 23 New York City Bank Branches

Commercial Property News - July 6, 2007

A portfolio of 23 Citibank branches in the New York City metropolitan region drew an unusual level of interest from investors before it fetched $139.4 million from the winning bidder, an affiliate of Aegon, the Dutch life insurance and pension firm.

“This is one of the most actively bid portfolios that we’ve ever handled,” Kenneth Zakin, a senior managing director at Newmark Knight Frank, told CPN this morning. Zakin led the NKF team that handled the transaction in concert with an in-house team from Citigroup. Aegon was represented by a Dubuque-based affiliate, Aegon USA Realty Advisors Inc.

All told, some 50 potential investors participated in the first round of bidding, and up to 20 bidders continued through the second round. Bidders ran the gamut from REITS and private investors to net-lease and 1031 exchange investors, Zakin noted. About half of the properties are net-leased by Citibank and the rest have multiple tenants.

Zakin attributed the strong competition for the assets to the rare combination of a credit tenant--in this case, Citibank--offering attractively located branches. “We haven’t seen, in the New York metro area, this kind of product,” he explained. The 207,000-square-foot portfolio is distributed through four of New York City’s five boroughs plus the affluent suburbs of Nassau and Westchester Counties. Zakin suggested that Citibank’s sale-leaseback strategy reflects the national trend among commercial banks of monetizing assets. Sphere: Related Content