Monday, December 22, 2008

Spanish Savings Bank CAM Enters EUR 63 Million Sale Leaseback of Three Office Buildings in Spain

PropertyEU - December 18, 2008

The employee pension fund of Spain's savings bank Caja de Ahorros del Mediterraneo (CAM) has acquired three office buildings from the bank for EUR 63 mln. The assets are located in Alicante, Valencia and Barcelona, and have been leased back to CAM for a period of 20 years with an option to extend for a further 10 years.

The fund said this sale-and-leaseback transaction is expected to 'give more stability to its real estate portfolio, as it provides a stable income stream which is less subject to market volatility. Sphere: Related Content

Tuesday, December 16, 2008

Caixa Catalunya Seeking EUR 500 Million Sale Leaseback of 824 Bank Branches Across Spain

Reuters - December 14, 2008

Spanish savings bank Caixa Catalunya is seeking to sell 824 of its 1,200 buildings in Spain in a bid to raise 500 million euros ($663.4 million), La Vanguardia reported on Sunday, citing sources at the bank.The bank wants to strike a deal with potential buyers to continue to rent the branches, with a buy-back option for 10, 15 and 20 years, and wants to sell them in lots of 5 million euros, which would include 10 to 15 premises, the paper said.

The bank is in particular targeting its private banking clients as potential buyers, it added.

Its head office in Barcelona is not up for sale, added the report. No one was immediately available at the bank on Sunday to comment.

Other Spanish banks have also closed leaseback deals on their property, notably Spain's largest bank Santander (SAN.MC), which has sold more than 1,150 of its branches and other buildings and its headquarters complex at Boadilla del Monte on the outskirts of Madrid. Sphere: Related Content

Sunday, December 14, 2008

Tesco Pursuing €212 Million Sale Leaseback of Six Properties in Ireland

Property Week - December 12, 2008

Tesco plans to sell properties in the Republic of Ireland worth €212m (£184m), including shopping centres Golden Island in Athlone and Artane Castle, Artane, north Dublin.

It is looking for €60m (£52m) for Golden Island, which would reflect a net initial yield of 6.15%, and €35m (£30m) for Artane Castle – a yield of more than 6%.

DTZ Sherry FitzGerald is quoting €116.9m (£101m) for a sale and leaseback of four other stores. Sphere: Related Content

Sunday, December 07, 2008

European Banks Look to Sale Leasebacks for Liquidity Amid Tight Capital Markets

Property Week - December 5, 2008

European banks have embarked on a slew of sale and leasebacks in an attempt to raise cash amid the global economic turmoil.

Collapsed Belgian bank Fortis, BBVA and Banco Sabadell have all put portfolios on the market.

Almost every other top European bank, from Italy’s UniCredito to Royal Bank of Scotland in the UK, is also scrutinising its property holdings to see where money can be made.

A report by Merrill Lynch found that Europe’s leading banks need to raise a further €73bn (£61bn) to keep their finances steady.

Cushman & Wakefield found that the top 43 European banks have €63bn (£52bn) of property assets on their balance sheets (see table).

Matthew Stone, head of occupier strategy at Cushman & Wakefield, said: ‘One increasingly popular method for banks to raise capital is through sale and leasebacks. The Spanish banks, BBVA and Banco Sabadell, and Fortis of Belgium, have all recently announced plans for billions of euros of sale and leaseback transactions, and many other European banks are actively considering them as a cost-efficient method of raising finance.

‘Leading European banks have over €63bn of land and buildings on their balance sheets which, if fully monetised, would meet almost all the €73bn of additional capital needs estimated by Merrill Lynch.’

There are investors willing to buy this kind of property. The fact that some banks have been bailed out by governments provides reassurance that they are safe from insolvency and are good covenants. Sphere: Related Content

Wednesday, December 03, 2008

Renown Agrees to $89.3 Million Sale Leaseback of Two Properties in Japan

Trading - December 1, 2008

Japan's Renown Inc. (TSE:3606) said Friday that it will sell its headquarters building in Tokyo and an office building in Osaka for a total of 8.5 billion yen (US$89.3 million). The apparel company, which is undergoing rehabilitation, plans to use the proceeds to reduce interest-bearing debt and renovate stores.

Renown will sell the Tokyo property to building-leasing firm TOC CO. (8841) for 6 billion yen and the Osaka property to condominium builder Haseko Corp. (TSE:1808) for 2.5 billion yen.

It will sign lease contracts with the buyers and continue using the buildings. Sphere: Related Content

Tuesday, December 02, 2008

Dearth of Financing Slows Sale Leasebacks

Financial Week - November 30, 2008

The credit crunch is killing the trend of using sale-leasebacks to raise capital, because frozen conditions have made it nearly impossible to get deals done.

Through Nov. 1, sale-leasebacks totaled $6.2 billion, less than half of the $14.2 billion in such transactions seen during 2007, according to Real Capital Analytics. Most of the deals that do close are one-off, single-tenant transactions amounting to less than $100 million each, experts say, a change from the large portfolio deals that dominated the market in years past.

From 2002 through 2007, sale-leasebacks gained popularity with private equity firms, which sold real estate assets from acquisitions to pay off the loans used to bankroll their leveraged buyouts. Having less invested capital increased PE firms’ net returns on assets and equity.

But few other corporations saw the need for them because the liberal lending atmosphere made capital promptly and cheaply obtainable. As that lending has dried up, sale-leasebacks, like most other forms of financing, have become both more desirable and less available.

Sale-leasebacks have slowed dramatically,” said Dan Fasulo, managing director of Real Capital Analytics. “It’s counterintuitive, because you’d think that they would be thriving in this type of environment. But it doesn’t matter how good the tenants are, the lenders just are not there.”

One reason is that lenders can no longer package loans for sale-leasebacks into securities as they did during the real estate boom.

“If the debt is available, it’s available in smaller denominations, because you are working directly with a lender, not from a securitization anymore,” said Mindy Berman, the managing director of corporate capital markets at Jones Lang LaSalle.

In addition to providing another source of capital, sale-leasebacks offer a way to reap gains on property that has been on the balance sheet. Companies have been depreciating their real estate assets for years, so the book value of those assets is low and companies should realize hefty profits on sales. But commercial real estate prices have come down considerably from their 2007 highs, and some executives harbor unrealistic expectations regarding the value of their properties, experts said.

“There is still a real spread between sellers’ expectations and what buyers are willing to pay,” said Arthur Greenberg, an executive vice president in the Washington office of real estate broker Studley. “There is a lot of money sitting on the sidelines, but it is primarily private equity money, and [private equity] has higher yield expectations than the current market is offering.”

Potential investors will only consider deals for top-notch properties whose tenants have stellar credit, and they’re looking for long-term leases that stretch to 15 years instead of 10. Medical office building sale-leasebacks represent a bright spot in the industry, while deals have dried up in sectors that have suffered more from the financial slowdown, such as retail or automotive.

“Underwriting has changed significantly in the sale-leaseback realm,” said Ms. Berman of Jones Lang LaSalle. “We’re back to basics. You need to underwrite the credit of the tenant and the property fundamentals.”

Still, Ms. Berman said her office fields calls every day from companies interested in determining the value of their property and the feasibility of a sale-leaseback.

“In today’s market, everyone is desperate,” said Bill Pollert, president of CapLease, a real estate investment trust that specializes in single-tenant properties. “They’re looking for every possible way to generate capital. It’s hard for companies that are not in real estate to justify owning property.”

Experts expect the sector to lead the rebound in commercial real estate once credit conditions relax.

“Fundamentally, the economics that justify sale-leasebacks are strong and viable,” Mr. Pollert said. “It’s a segment that will come back and will be strong once the debt markets come back. There is a lot of pent-up demand out there.” Sphere: Related Content

Tuesday, November 18, 2008

Trent Ltd Considers Sale Leaseback of Retail Portfolio in India to Fund Expansion - November 16, 2008

Trent Ltd, the fashion retailer headed by Noel Naval Tata, is considering sale of some of its prime properties to raise cash for expansion. Because the retail business needs physical space, Trent will take the properties back on lease.

Senior Trent officials told Financial Chronicle that, at current realty prices, up to Rs 700 crore ($9 Billion) could be raised by selling its properties across India, the combined space of which is almost 300,000 sq ft.

The properties include an office building in Mumbai’s suburban business district of Bandra Kurla complex, Spencer’s Plaza in Chennai and a property each in Delhi and Ahmedabad.

“We could enter into a sale and leaseback agreement, thus freeing up a considerable amount of cash for our expansion without having to raise fresh equity through a rights issue,” a top Trent official said.

The money along with internal accruals is expected to help Trent fund its Rs 2,000 crore investment in the Star India Bazaar hypermarket chain and Westside retail stores. The company also needs money to expand its Landmark book and music stores and for its new value-retail format and investments in setting up or expanding its upmarket Sisley, Topman and Topshop retail stores.

Among listed retailers in India, Trent has the highest gross margins in terms of percentages of sales and per sq ft of space used, according to a recent study by the brokerage, CLSA. Sphere: Related Content

Sunday, November 16, 2008

Banco Sabadell Considering EUR 500 Million Sale Leaseback of 600 Bank Branches Across Spain

Monereo Meyer Marinel Web Site - November 14, 2008

Banco Sabadell is considering selling approximately 50% of their branch offices. The entity is planning to sell 600 offices in its network under the sale and leaseback model, a transaction that provides investors with great security and a potential payoff of between 500 and 600 million Euros.

According to data from the Spanish newspaper Expansión, Banco Sabadell has confirmed that the transaction of the sale of up to 600 branches currently owned by the bank is in its initial phase, and would not take place until 2009. The transaction would involve the sale of blocks or parts of these assets, under the sale and leaseback model, with Sabadell remaining as a tenant for a period of between 25 and 30 years, with a final option of buying the property back, thus guaranteeing safe and steady income for the buyer. This type of transaction offers great security to investors since it is backed by an entity with a good rating. Market experts have said that the entity could earn between 500 and 600 million Euros.

According to preliminary plans, the corporate offices would not be included in the transaction although sources close to the entity note that they have also been appraised. Banco Sabadell began appraising their real estate assets a year ago and confirms that they are in no hurry to sell and intend to wait for an interesting opportunity to present itself. In fact, the bank has strengthened its balance sheet this year by selling half of its bank insurance business to Zurich, with a capital gain of 512 million Euros.

Banco Sabadell will thus join Spanish financial institutions that have decided to sell off part of their real estate holdings, a trend Banco Santander started with BBVA, Banco Popular and Caixa Galicia following suit. Sphere: Related Content

Friday, November 14, 2008

Taylor Wimpey Pursuing £100m Sale Leaseback of 350 UK Show Homes

Property Week - November 14, 2008

Taylor Wimpey is to carry out a sale and leaseback of around 350 of its show homes in a bid to reduce debt and improve cashflow. The listed housebuilder plans to sell the UK-wide show home portfolio for between £70m and £100m and pay rental income to the buyer for up to three years. It is thought to have instructed King Sturge and last Wednesday sent details to selected institutional-type investors.

Taylor Wimpey needs working capital and access to the show homes, which have an average value of around £200,000, to market its developments. The buyer would gain a sizeable portfolio and a guaranteed three-year income stream without voids, and eventual ownership of 350 homes at a time when the housing market could be in recovery. It could provide investors with an initial yield of between 6% and 7%.

Packaging the homes up as a portfolio is thought to be an innovative way for Taylor Wimpey, led by chief executive Peter Redfearn, to reduce its £1.9bn debt burden. In an interim management statement on Tuesday, Taylor Wimpey said it was unlikely to agree a new debt package by January, when its covenants may be tested. Redfearn said Taylor Wimpey was ready to sell parts of its UK land banks or non-core parts of the business if necessary. The sale-and-leaseback plan would be one such option.

Taylor Wimpey is valued at around £142m, down from a high of £4.3bn last year. It has significantly reduced costs with 1,900 job cuts, land sales and a construction slowdown. Neil Batty, Knight Frank’s new homes investment head, said all housebuilders were looking at ways to extract value. Sphere: Related Content

Tuesday, November 11, 2008

Eroski Agrees to EUR 361 Million Sale Leaseback of 15 Hypermarkets in Spain

Property Week - November 5, 2009

Topland has agreed the purchase of a 15-strong retail portfolio with Spanish retailer Eroski in Spain’s biggest hypermarket sale and leaseback deal.

Topland has paid €361m (£289m) for the portfolio, comprising 13 hypermarkets and two shopping centres, totalling 1.55m sq ft, in a deal which reflects a yield of approximately 6%. The properties are in the Basque area of Spain near the Pyrenees mountains.

The deal could be the first phase in a three-part sale and leaseback agreement between the two parties which could see Topland buying more than 50 Eroski properties for about €1bn (£808m).

Topland will provide equity for 30% of the first purchase with the remaining 70% coming from bank debt from a consortium of La Caixa, Banco Bilbao Vizcaya Argentaria, Banco De Sabadell, Banco Espanol De Credito, Banco De Vasconia and Caja Madrid.

Eroski has signed 25-year leases with fixed rental increases as part of the deal.

The company has been sitting on the sidelines of the investment market having amassed £1bn of equity from refinancing parts of its £5bn portfolio and through the sale of its 50% interest in a 35-strong, £950m Tesco portfolio, to Pearl Group’s Axial Investment Management in September last year. Sphere: Related Content

Friday, November 07, 2008

Eroski Completes €361 Million Sale Leaseback of 15 Hypermarkets in Spain

Property Week - November 5, 2008

Topland has paid €361m (£289m) for the portfolio, comprising 13 hypermarkets and two shopping centres, totalling 1.55m sq ft, in a deal which reflects a yield of approximately 6%. The properties are in the Basque area of Spain near the Pyrenees mountains.

The deal could be the first phase in a three-part sale and leaseback agreement between the two parties which could see Topland buying more than 50 Eroski properties for about €1bn (£808m).

Topland will provide equity for 30% of the first purchase with the remaining 70% coming from bank debt from a consortium of La Caixa, Banco Bilbao Vizcaya Argentaria, Banco De Sabadell, Banco Espanol De Credito, Banco De Vasconia and Caja Madrid.

Eroski has signed 25-year leases with fixed rental increases as part of the deal.
The company has been sitting on the sidelines of the investment market having amassed £1bn of equity from refinancing parts of its £5bn portfolio and through the sale of its 50% interest in a 35-strong, £950m Tesco portfolio, to Pearl Group’s Axial Investment Management in September last year.

Cushman & Wakefield advised both parties. Sphere: Related Content

Sunday, November 02, 2008

British Land Selling Debenhams Flagship Store in London for £150 Million

Property Week - October 31, 2008

A Ukrainian investor is under offer to buy the British Land-owned Debenhams block in London’s West End for £150m.

It is thought the investor is the same Ukrainian company which recently purchased 1 Old Bond STreet for around £14m from Scottish Widows Investment Partnership in a deal reflecting a net initial yield of 3.9%.

The company approached British Land to buy the 366,700 sq ft building which occupies a prime position on London’s main shopping street and is the department store operator’s flagship store. It has been known for some time that British Land is seeking to reduce its in-town retail exposure.

British Land, the UK’s second-largest REIT, is an investor in 36 department stores, 24 owned directly and 12 owned within the British Land Fraser joint venture.

Of those owned directly, 22 are subject to leaseback to Debenhams for a minimum of 26 years unexpired. In total these comprise 3.3m sq ft in locations including the flagship London store, a 466,000 sq ft store on Market Street in Manchester, and a 140,000 sq ft store in St Davids, Cardiff.

The total gross annual rent passing is £30.3m. The leases provide for minimum 2.5% per annum rental increases and five-yearly open market reviews from 2019 onwards.

British Land declined to comment. Sphere: Related Content

Saturday, October 18, 2008

Meavita Nederland Enters Sale Leaseback of 27 Health Care Properties in the Netherlands

PropertyEU - October 16, 2008

Dutch firm Green Real Estate has acquired 27 properties from healthcare organisation Meavita Nederland in a sale-and-leaseback transaction. The financial details were not disclosed.

Meavita Nederland disposed of the properties as it no longer views real estate ownership as a core activity. The portfolio comprises 14,000 m2 of lettable area and includes consultancy offices and medical centres in the north, centre and east of the Netherlands.

The healthcare division of property broker DTZ Zadelhoff acted for Green Real Estate. Ans de Wijn Bedrijfshuisvesting advised Meavita Nederland. Sphere: Related Content

Wednesday, October 15, 2008

GM Seeking $500 Million Sale Leaseback of Detroit HQ

Commercial Property News - October 14, 2008

Less than six months after it paid off its debt on its Detroit headquarters, struggling automaker General Motors is trying to refinance the Renaissance Center or arrange a sale-leaseback to raise about $500 billion.

GM officials recently appeared before the Detroit Police & Fire Retirement System Pension Fund board in an effort to get the board to agree to a $250 million collateralized revenue bond investment, according to a Detroit Free Press report. If that pension board agrees, GM would seek another $250 million from another city pension fund.

But GM may have trouble getting the first pension board to invest. Several pension board trustees told news groups that they considered it too big of a risk.

GM moved into the Renaissance Center, a seven-building complex in downtown Detroit in 1996. The automaker bought the complex for $75 million, and then borrowed $500 million against it for remodeling, according to a Detroit News story by Robert Snell. As reported May 9 by CPN, GM paid $626 million to take full control of the building.

John Blanchard, GM’s executive director of worldwide real estate, could not be reached by press time, but has stated this week that if the deal with the pension funds could not worked out, the auto giant would consider selling the Renaissance Center and leasing back space. He said the company is committed to staying in Detroit. The proposed refinancing comes as GM is trying to raise $15 billion to provide cash flow through 2010, according to published reports. Sphere: Related Content

Tuesday, September 30, 2008

Kesko Completes EUR 44 Million Sale Leaseback of 23 Stores in Finland

Kesko Web Site - September 30, 2008

The Kesko Group, the Kesko Pension Fund and Valluga-Sijoitus Oy have today sold 23 of their store properties in different parts of Finland to Aberdeen Property Fund Finland 1 Ky. The selling price is about 56 million euros, of which the Kesko Group's share is about 44 million euros. The Kesko Group's gain on the sale is about 16 million euros, which will be treated as a non-recurring item in Kesko's third quarter operating profit.

All of the above premises have been leased back for use by Kesko's division parent companies mainly under 5 or 10-year leases with extension options. The total lease liability for the properties sold by the Kesko Group is approximately 27 million euros (a 6.2% initial yield) and is not classified as a finance lease.

Of all the 23 properties included in the sale 20 are used by K-food store chains, and two by the K-rauta and Rautia chains. The sale also includes Kesko's Northern Finland district centre property in Oulu. The sale will not change the stores' operations. The total area of the properties sold is about 50,000 m2, of which the Kesko Group's share is about 35,000 m2

The aim of the property disposal is to enhance the use of the Kesko Group capital. The proceeds from the sale will be used to strengthen the store network in Finland and abroad,

At 31 December 2007, Kesko owned 1.0 million m2 of properties and had 2.6 million m2 of properties on leasehold in Finland and other Nordic countries, the Baltic countries and Russia. Kesko's store site investments were 189 million euros in 2007. Sphere: Related Content

Monday, September 29, 2008

Pep Boys Completes $77.5 Million Sale Leaseback of 22 Auto Parts Stores

CoStar Group - September 24, 2008

Corporate Partners Capital Group Inc., a Los Angeles-based company that specializes in structuring purchase-leaseback transactions with corporations, acquired 22 properties in various locations across the United States from The Pep Boys Manny Moe & Jack of California and Wachovia Development Corp. The aggregate purchase price was $77.5 million, or approximately $177.50 per square foot, and had an estimated cap rate of 7.5%.

The 22-retail properties total 474,434 square feet. The buyer entered into agreements to lease the properties back to be operated as Pep Boys stores.

Howard Sands of Corporate Partners Capital Group Inc. represented the buyer in-house. Harry Yanowitz, Alexander Spooner and Joe Cireli of Pep Boys and John Altmeyer of Wachovia represented the sellers in-house. Sphere: Related Content

Friday, September 26, 2008

Del Taco Completes $24 Million Sale Leaseback of 15 Store Restaurant Portfolio

Cityfeet / GlobeSt - September 24, 2008

A locally based group of investors in a 1031 exchange have acquired a 15-store portfolio from Del Taco restaurants in a sale-leaseback, according to Faris Lee Investments, which brokered the deal. The restaurants are located in Arizona, California and Nevada and were built between 1998 and 2002.

The buyer was Innovative Property Partners LLC, a group of investors based in Orange County, who were represented by Richard Walter and Dennis Vaccaro of Faris Lee, which is based in Irvine. Del Taco Corp., which represented itself in the transaction, executed 20-year absolute NNN leases with the buyer and will continue to operate the properties.

Del Taco was founded in 1961 and operates or franchisees more than 510 restaurants in 16 states. The company is based in the Orange County city of Lake Forest.

According to Walter, who is president of Faris Lee Investments, “Del Taco Corp. was interested in a quick sale of the properties, and we were able to close the sale in just 45 days, which also met the needs of the 1031 buyer.” Walter notes that closing on 15 different sites in three different states “required a great deal of work during the due diligence process” in order to close by the deadline and to meet the expectations of both the seller and the buyer.

Walter adds that Faris Lee Capital, the financing arm for Faris Lee, coordinated and placed the financing for the buyer, who was attracted to the long-term leases and well located properties. He notes that Faris Lee is seeking other sale-leaseback opportunities to match buyer needs with niche opportunities like this one." Sphere: Related Content

Wednesday, September 17, 2008

Citibank Seeking Sale Leaseback of 18 Bay Area Bank Branches

Silicon Valley / San Jose Business Journal - September 15, 2008

Citibank, the retail banking operation of financial services giant Citigroup Inc., has put 18 Bay Area branch locations on the market.

The locations for sale -- which include sites in Burlingame, San Mateo, Los Altos, Palo Alto, San Jose, Santa Clara and Sunnyvale -- are exceptional, said retail broker Don Tepman.

“Most, if not all, of these properties are very well located and I consider them to be among the Bay Area’s top real estate sites for retail,” Tepman said. “Rarely do we see product of this quality with such strong credit tenant backing.”

Citibank is offering to sell the locations and to sign 10-year leases plus options, according to an offering document. The company is promising annual 3 percent rent increases. The sites are for sale individually and en masse.

Citi has retained CB Richard Ellis to handle the offering. Sphere: Related Content

Sunday, September 14, 2008

State of California Enters 20 Year Lease for Highway Patrol HQ in Sacramento - September 12, 2008

The state has inked a 20-year lease for a 285,000-sf, three-building low-rise campus here on behalf of the California Highway Patrol. Known as Continental Plaza, the buildings will be used to consolidate CHP’s administrative functions, which are now spread among several buildings in the Sacramento area. The law enforcement agency is slated to fill its new headquarters with 1,000 employees next September.

The state’s lease rate starts at $2.44 per sf per month, fully serviced with the exception of utilities, an information office with the state Department of General Services tells The lease agreement includes a $41-million ($144 per-sf) tenant improvement allowance, annual rental rate bumps (approximately 1.5%) and a purchase option that may be exercised at the end of either year 10 or year 20. If exercised at year 10, the purchase price would be based on a 7% cap rate on the property’s NOI for year 11, according to DGS. If exercised at the end of the lease term, the purchase price would be based on a 7% cap rate on the NOI rent from year 19. If the state pays rent for 20 years, it would pay the property owner $193 million, according to DGS.

“The fact that Continental Plaza was an existing facility offered many benefits, including cost savings to the agency, an accelerated occupancy schedule and the reuse of an existing structure, [which is] part of the state’s ‘green’ strategy,” Newland says. Per state requirements, all three buildings will be renovated with the goal of receiving a LEED-NC-Silver certification from the US Green Building Council.

The property owner is Grove Investment Co. of Newport Beach, CA. Grubb & Ellis brokers Bill Newland, Clyde Rawlings and Toss Vallentine represented the building owner in the transaction. Cornish & Carey represented the state. Sphere: Related Content

Thursday, September 11, 2008

Norske Skog Completes $75 Million Sale Leaseback of HQ in Norway

Reuters - September 9, 2008

Norwegian papermaker Norske Skog (NSG.OL) has sold its headquarters for 429.5 million Norwegian crowns ($75.76 million) and will book a gain of 230 million in the fourth quarter from the property sale, it said on Tuesday.

'The sale of the property is part of the work efforts to reduce Norske Skog's debts,' the company said in a statement.

Norske Skog simultaneously signed a lease agreement on the Oxenoen property in Lysaker with the new owners, Aspelin Ramm and Oslo housing and savings society OBOS, enabling it to stay in the building for some time, the company said. Sphere: Related Content

Monday, September 08, 2008

IRS Extends Offer to Settle LILO & SILO Law Suits

The Providence Journal / Bloomberg - September 6, 2008

The Internal Revenue Service gave 45 companies, including Providence-based Textron Inc. as well as utilities and banks, an extra month to decide whether to settle disputes over their use of a leasing tax shelter ruled improper by several courts.

In exchange for terminating the transactions, known as lease-in, lease-out or sale-in, lease-out deals, the companies can keep 20 percent of their savings and the IRS will waive some penalties.

The settlement offer involves shelters such as the one used by Wachovia Corp., which an appeals court ruled against in April. The bank said the ruling would cost it $975 million in back taxes.

The tax agency, in an announcement on its Web site, said companies have 60 days to respond to an offer letter it began sending on Aug. 6. The extension from 30 days was granted “to provide taxpayers with sufficient time to evaluate the offer,” the Web site says.

Under the terms of the IRS’ offers, the companies must use their best efforts to terminate the transactions by Dec. 31. In some cases, the IRS will give taxpayers until Dec. 31, 2010, to unwind the deals.

Companies must agree to concede 80 percent of all deductions associated with the transactions for taxes due in years before 2008. In exchange, the IRS won’t tax certain income generated by the transactions for the same years.

An IRS release said the government won’t agree to settle any of a taxpayer’s shelter-related tax issues unless the bank or company accepts the settlement terms for all of its lease transactions.

Companies have been trying to decide whether to accept the settlement or take their chances in court, said Ralph Izzo, chief executive officer of one of the 45 targeted companies, Public Service Enterprise Group Inc., owner of New Jersey’s largest utility. The IRS has scored victories in federal courts against BB&T Corp., Fifth Third Bancorp and KeyCorp.

Izzo said at an investor conference that, in his company’s case, taking the settlement may exceed cash reserves it has set aside.

The settlement offer affects a “broad range of companies,” Shulman said last month. In addition to banks, companies such as Altria Group Inc., the largest U.S. tobacco company, and Textron, maker of Cessna aircraft, engaged in the transactions.

The tax shelters, known by the acronyms LILO and SILO, entail letting banks or other companies to buy subway cars or other public assets and lease them back to cities or transit authorities. The banks and companies claimed tax deductions, such as depreciation on the equipment.

The leasing arrangements provided revenue to cities, transit systems, airport authorities and other municipal services.

Promoters of the transactions, such as Brussels-based Dexia SA, told clients that the arrangements would let buyers save on taxes as the assets depreciated, although the companies wouldn’t own or operate the equipment or services. The IRS challenged the arrangements in court, saying the purchase-and-lease transactions were shams designed to produce tax deductions on assets that the banks and companies never truly owned.

From 2001 to 2003, at least 16 U.S. companies bought transportation assets from cities through 35 leasing agreements. Other companies sought tax breaks by leasing municipal services, such as sewer lines in Germany and the Alamodome arena in San Antonio, as well as emergency 911 call centers in Chicago and air-traffic-control systems in Australia, Canada and France.

Shulman said about 1,000 separate transactions could be unwound as a result of the settlement. Sphere: Related Content

Saturday, August 30, 2008

Southern Cross Healthcare Agrees to £31.1 Million Sale Leaseback of Nine UK Care Homes

RTTNews - August 29, 2008

Southern Cross Healthcare, a provider of UK care home services, announced the sale and long-term leaseback of the freehold interests in nine care homes to a subsidiary of Daejan Holdings Plc for £31.1 million.

The gross asset value of the nine freehold interests is £37.2 million. The company said it would incur a book loss of £6.1 million on completion of the sale. It will pay £2.5 million for these homes as annual rent (8.0% cap rate.)

The company said it will use the proceeds from the divestment to partially pay down two syndicated credit facilities and a bilateral credit facility put in place earlier this year to fund additional acquisitions and developments.

Further, Bill Colvin, chief executive of Southern Cross, said, "Discussions are ongoing with other potential purchasers regarding further 20 freeholds to be divested and the proceeds from any sale will also be used to further reduce borrowings. Southern Cross is continuing to discuss with its banking syndicate the provision of longer term funding arrangements for the Group." Sphere: Related Content

Wednesday, August 27, 2008

Life Time Fitness Complets $100 Millon Sale Leaseback of Four US Fitness Centers

MarketWatch / Business Wire - August 25, 2008

Senior Housing Properties Trust (SNH) today announced that it has acquired four health and wellness centers operated by Life Time Fitness, Inc. (LTM) for $100 million. Simultaneously, SNH entered into a long term lease arrangement with Life Time Fitness for these same properties.

The rent payable by Life Time Fitness to SNH for these four health and wellness centers will be $9.1 million per year (9.1% cap rate), plus fixed increases during the lease term. These health and wellness centers have a lease term ending in 2028, plus tenant renewal options thereafter. SNH has funded this transaction by drawing under its revolving bank credit facility.

Senior Housing Properties Trust is a real estate investment trust which owns independent and assisted living communities, nursing homes, rehabilitation hospitals, wellness centers and medical office buildings throughout the United States. SNH is headquartered in Newton, MA. Sphere: Related Content

Sunday, August 24, 2008

AT&T Completes $72 Million Sale Leaseback of Atlanta Office Complex

Jones Lang LaSalle Web Site - August 22, 2008

Jones Lang LaSalle announced today it has closed the sale and leaseback of the two-building complex in Atlanta’s Northlake/Lavista submarket for AT&T. Equity Capital Management purchased the 406,292 square foot complex for $72 million.

At closing, AT&T executed a long-term leaseback for for both 2245 and 2247 Northlake Parkway in Tucker, Georgia, signaling its continued commitment to the facility and market.

This transaction marks the first closing within the Jones Lang LaSalle capital markets group by a newly-merged/legacy Staubach team. Managing Directors Jay Koster (New York) and Brad Armstrong (Atlanta) completed this assignment along with Vice Presidents Mike Hochanadel and Chris Wagner. The same transaction team completed the $275.2 million, 1.1 million square foot, sale-leaseback of Lenox Park, located in Atlanta’s Buckhead submarket, for AT&T in May of this year.

The Class-A property is located in the northeast Atlanta metropolitan area in the city of Tucker. It has immediate access to I-285 and is just three miles from the I-85/I-285 junction. Atlanta’s Hartsfield-Jackson International Airport is less than 25 minutes away, and the property is just 15 minutes from Dekalb Peachtree Airport. The building known as 2245 Northlake Parkway has three stories and was built in 1980. The building known as 2247 Northlake Parkway is a 10-story building built in 2000. Combined, the properties have more than 1,500 parking spaces, both structured and surface. Sphere: Related Content

Friday, August 22, 2008

General Reinsurance Signs 20 Year Lease for Stamford HQ

BNET / Real Estate Weekly - August 20, 2008

A team that recently joined Jones Lang LaSalle through its merger with The Staubach Company has completed a new direct lease transaction for General Reinsurance Corp. at Building and Land Technology's Long Ridge Corporate Center campus in Stamford, Conn. The reinsurance company signed a 20-year lease for the entire 310,000 s/f 120 Long Ridge Road office building.

The tenant was represented by Brian Higgins, managing director--brokerage, Jay Koster, managing director--capital markets, and Chris Kraus, managing director--brokerage, all with Jones Lang LaSalle's New York office. The team worked closely with Michael A. Rea, vice president with Gen Re, throughout the process. Property owner Building and Land Technology was represented in-house by Carl Kuehner, chief executive officer, and Paul Kuehner, chief financial officer.

Gen Re is relocating to 120 Long Ridge Road from 695 East Main Street, also known as Financial Centre, which had served as the reinsurer's headquarters for the past 25 years. The company's master lease at Financial Centre is set to expire in 2010. Gen Re plans to occupy its new headquarters space at 120 Long Ridge Road in late 2009. Sphere: Related Content

AT&T Completes $345 Million Sale Leaseback of Dallas HQ

Atlanta Business Chronicle - August 20, 2008

An otherwise pretty mundane summer 2008 in the Atlanta commercial real estate marketplace is closing out with the biggest of bangs, thanks to a mega-deal involving several big names and a high-profile property.

In a blockbuster, $345 million transaction that closed Aug. 14, global telecommunications provider AT&T Inc. (NYSE: T) entered into a sale-leaseback agreement for AT&T Tower, the 1.8 million-square-foot building at 675 West Peachtree St. that is the most visible component of its three-building Southeastern regional headquarters complex.

AT&T sold the landmark 47-story Midtown building — which was known as the BellSouth Tower until the $86 billion AT&T/BellSouth merger in 2006 — to a wholly owned subsidiary of Icahn Enterprises L.P., a holding company headed by billionaire financier and investor Carl Icahn. As part of the transaction, AT&T agreed to lease the building back on an unspecified mid- to long-term basis.

On the brokerage side, the deal was negotiated by a Jones Lang LaSalle Inc. capital markets team comprising managing directors Jay Koster and Brad Armstrong, along with vice presidents Mike Hochanadel and Chris Wagner. Koster and Hochanadel are based in JLL’s New York office, while Armstrong and Wagner are part of the real estate services provider’s Atlanta operations. Sphere: Related Content

Thursday, August 21, 2008

Tesco Completes $1.1 Billion Sale Leaseback of 13 UK Stores & Distribution Center

Bloomberg - August 21, 2008

Tesco Plc, the U.K.'s biggest retailer, sold properties to real-estate investors for 605 million pounds ($1.1 billion), its fourth such disposal in two years, freeing up capital for overseas expansion.

The 13 stores and a distribution center were purchased by four buyers, including investment arms of insurers Prudential Plc and Sun Life Financial Inc., and represent 2.4 percent of the value of the grocer's stores, Cheshunt, England-based Tesco said today. The company is leasing back the properties for 20 years, with the right to extend the contracts.

Tesco has about 1,780 U.K. outlets. It gets more than 25 percent of its sales abroad and entered the U.S. last year. Over the past two years, rising values for property assets had lured investors to retailers such as J Sainsbury Plc, which rebuffed demands for a real-estate split.

``Tesco freehold property sales show that there is still good pension-fund appetite for supermarkets,'' analyst Nick Bubb of Pali International said in an e-mailed note.

The disposal is part of Tesco's plan, announced two years ago, to raise 5 billion pounds through property sales, of which it has so far raised 2 billion pounds, including today's announcement.

The stores all pay landlords a return of at least 4.88 percent on their investment as a percentage of the purchase price, Tesco said. The company has estimated the value of all of its real estate at 31 billion pounds.

One of the buyers was the Universities Superannuation Scheme, Britain's second-largest pension fund, which runs money for academics and college staff. Tesco formed a joint venture with USS that will own the property.

The rest of the properties were bought by Prudential Plc's Prupim property-investment arm, Sun Life's Canada Life division, and LaSalle Investment Management, a unit of commercial real- estate broker Jones Lang LaSalle Inc. Sphere: Related Content

Tuesday, August 19, 2008

Bulgarian Telecom Planning EUR 300 Million Sale Leaseback of 100 Properties

Estates Gazette is reporting that Bulgaria’s former state telecom operator Bulgarian Telecommunications Co (BTC) is seeking international investors for a large 20-year sale-and-leaseback transaction.

The company will reportedly market a €300m portfolio of its most valuable 100 sites in September, including the Telecom Palace in Sophia, which could be redeveloped. BTC will lease back some of the offices and warehouses for up to 20 years, offering the rest for development. The initial yield on the 3.2m sq ft portfolio will be 10%.

Cushman & Wakefield affiliate Forton International is representing BTC which is reviewing whether it needs to own any of its 2,000 properties. BTC wants to release equity to invest in core operations.

BTC was privatised in 2004 and is now owned by US insurance giant AIG. Sphere: Related Content

Canadian Tire Agrees to CAN $174 Million Sale Leaseback of 12 Stores Across Canada

The Chronicle Herald - August 19, 2008

Hard goods retailer Canadian Tire Corp. says it has struck a deal to sell and lease back 12 of its store properties for $174 million. Canadian Tire said late Monday the company will book a pre-tax gain on the sale of about $70 million. The transaction is subject to Competition Act approval and is expected to close in September.

The properties are located across Canada and include recently built or expanded Canadian Tire stores. Six of the properties also have a Mark’s Work Wearhouse outlet, the retailer’s clothing division.

Canadian Tire owns about 74 per cent of its store network and leases the rest of its other retail properties. The properties sold Monday represent about four per cent of Canadian Tire’s total real estate portfolio.

"While we continue to see real value in owning the majority of our real estate assets, carefully selected sale-leasebacks enable us to monetize the value of select properties creating financial flexibility while maintaining our overall operating flexibility." said Tom Gauld, president and CEO of the company.

"The properties included in this transaction are locations featuring stores that are either new or recently expanded so we do not see a need to relocate these stores in the foreseeable future. "This enables us to monetize these sites at attractive rates while creating financial flexibility."

Canadian Tire did not identify the buyer or buyers of the retail properties. Earlier this summer, however, the company sold an Ottawa store property for $40 million to RioCan Real Estate Investment Trust, Canada’s largest shopping mall owner, in a sale-leaseback deal.

In its release late Monday, Canadian Tire said it will continue to selectively look at cashing in on its extensive real estate assets, including two urban Canadian Tire stores and an Eastern Canada warehouse announced earlier this year.

Canadian Tire operates 1,170 general merchandise and apparel retail stores and gasoline stations across Canada. The company, with 57,000 employees, sells auto parts, sports and lesure equipment and home products. Sphere: Related Content

Friday, August 15, 2008

Longs Drug Stores to Pursue $1 Billion Sale Leaseback of Drug Stores, Distribution Centers and Office Buildings

The Modesto Bee - August 13, 2008

Longs Drug Stores, a regional drugstore chain based in Walnut Creek, is being acquired by industry giant CVS Caremark Corp., based in Woonsocket, R.I.

The $2.9 billion acquisition will make CVS Caremark the largest drugstore chain in California, with 830 stores. The company is the leading provider of prescriptions in the United States, and with the acquisition of the 521 Longs stores, it will operate 6,800 drugstores in 41 states and the District of Columbia.

One of the big attractions to buying Longs, said Tom Ryan, CVS chairman, president and chief executive officer, is gaining a strong market position in Central and Northern California and Hawaii. The two chains have few overlapping stores, according to Ryan. The Central and Northern California markets are difficult to enter because of the lack of available drugstore sites, Ryan said. Expanding into the markets by developing its own stores would have taken CVS about 10 years, he said.

Part of the cost of buying the Longs stores would be raised by selling the store properties that Longs owns, along with three distribution centers and three office buildings. The properties would be leased back to CVS, Ryan said. He estimated the value of the Longs properties at $1 billion.

The sale is subject to Longs shareholder approval and federal review. It is expected to be completed during the fourth quarter of this year. Sphere: Related Content

Sears Completes $56.1 Million Sale Leaseback of Warehouse in PA / - August 13, 2008

Sears Holdings Corp. has sold its one-million-sf distribution center at Covington Industrial Park to San Antonio-based USAA Real Estate Co.'s US Industrial REIT II. Published reports say the build-to-suit facility, which opened in April with Sears Logistics Services as its long-term tenant, changed hands for $56.1 million.

James Sheehan, senior director with Cushman & Wakefield Inc.'s Philadelphia office, tells that a sizable, brand-new facility like this is "extremely appealing to large institutional investors." Sheehan arranged the sale along C&W's Jerome Kranzel, Jeff Williams, Steve Cooper, Gerry Blinebury and James Vesey.

Completed in 2007, the building is the newest and largest of four facilities at the 800-acre industrial park, developed by Chicago-based First Industrial Realty Trust. It offers 32-foot clear heights, tilt-up concrete walls, ESFR sprinklers, cross-docking and additional trailer storage. Although a confidentiality agreement prevents him from disclosing the per-sf rates that Sears Logistics is paying, Sheehan says industrial rents in the northeastern Pennsylvania corridor range from "the high $3 to $4 range."

First Industrial had secured the Hoffman Estates, IL-based Sears as a build-to-suit tenant in in March 2007. The Sears site is in a portion of the park designated as a Keystone Opportunity Expansion Zone, which provides certain tax abatements through 2013. At that time, reported Pennsylvania's Department of Community and Economic Development and the Greater Scranton Chamber of Commerce provided Sears with $90,000 in customized job-training funds. Sphere: Related Content

ECI Seeking $42 Million Sale Leaseback on Petah Tikva HQ

Globes - August 14, 2008

Sources inform ''Globes'' that ECI Telecom Ltd. wants to sell its Petah Tikva headquarters for NIS 150 million in a sale and lease-back deal in long-term contract. The company has already contacted a number of insurance companies about a deal.

This is not the first time that ECI has sought to sell the building. Three months ago, it published a tender for the sale of all its properties for NIS 350 million. The tender included the headquarters, building rights on the same lot in Petah Tikva, and an additional lot in Givat Shmuel. The tender was closed in May after no bids were filed, apparently because the development aspects of the lands on offer were of no interest to insurance companies. Sphere: Related Content

Sunday, August 10, 2008

HVB Seeking Sale Leaseback of 200 Bank Branches in Germany

ADVFN News / Thomson Financial - August 8, 2008

Bayerische Hypo-und-Vereinsbank (HVB), the German unit of UniCredit Spa, is looking for buyers of its estimated 200 branch building under a sale and leaseback deal arrangement, according to Financial Times Deutschland, citing a spokesman for HVB.

It said HVB wants to sell its building properties, including those housing the main administration offices in Munich and Hamburg, to some real estate investors.

It said HVB wants to generate a mid-range three-digit million euros proceeds and is aiming to complete the deal by the end of the year. Sphere: Related Content

Friday, August 08, 2008

Northrup Grumman Signs Long Term Lease For Office Tower in El Sugundo, CA

Cityfeet / - August 6, 2008

Northrop Grumman Corp. has signed a 10-year, $120 million lease for all 333,000 sf at the 16-story, 101 Continental Blvd. office tower in one of the largest office leases in El Segundo in years. Although others involved in the deal declined to comment, citing confidentiality agreements, Northrop spokesman Brooks McKinney confirms that the aerospace giant will be expanding into the 101 Continental building, which is owned by Los Angeles-based Barker Pacific Group and Prudential Real Estate Investors.

Northrop Grumman is expected to begin moving into the building in phases, beginning in early December, and should fully occupy the building by July of next year. Xerox Corp. has leased space in the building since 1983 and still occupies a portion of the 16-story tower, which was built in 1972 and formerly was known as Xerox Centre. Xerox is slated to move out of its remaining space before the move-in by Northrop Grumman.

According to a report last year on, the owners of the 101 Continental building were marketing it as a multi-tenant property, rather than the single-tenant facility that it will be when Northrop Grumman moves in. Barker Pacific Group at the time said that it planned a $30 million renovation of the office tower to transform it to class A multi-tenant space, but how much of the $30 million in renovations will be necessary remains in question now that the office tower will be a single-tenant facility as opposed to multi-tenant.

McKinney tells that Northrop Grumman needs the 333,000 sf at 101 Continental for expansion of its Integrated Systems and Information Technology sectors, plus some space for corporate office administrative and engineering support functions. The aerospace giant has been growing of late, reporting a year-over-year earnings increase to $483 million from $472 million and a revenue boost of 10% to $8.6 billion for the second quarter ended June 30. Sphere: Related Content

Sunday, July 20, 2008

C&S Wholesale Grocers Completes $49 Million Sale leaseback of Distribution Center Near Birmingham

Birmingham Business Journal - July 18, 2008

Bruno's Supermarkets' food distributor C&S Wholesale Grocers recently sold its distribution facility in Oxmoor Valley to a real estate investment trust for nearly $49 million in a sale leaseback transaction.

Illinois-based Inland American Real Estate Trust Inc. purchased the 1.3 million-square-foot distribution facility and leased the facility back to New Hampshire-based C&S for 15 years.

Ogden Deaton with Birmingham's Graham & Co. Inc. brokered the deal along with CB Richard Ellis out of New Hampshire. Sphere: Related Content

Sunday, July 13, 2008

Indonesia Planning $2.01 Billion Sale Leaseback of Finance Ministry Land and Property

Reuters - July 11, 2008

An Indonesian parliamentary working committee approved the government's plan to issue Islamic bonds, also known as sukuk, late on Thursday, clearing the way for issuance in the domestic and global market this year. Here are some details about the sukuk.

* currency: rupiah-denominated sukuk to be sold in the domestic market and dollar-denominated sukuk abroad.

* timetable: August for the domestic issue and October for the international sukuk.

* underlying assets: 18.371 trillion rupiah ($2.01 billion) of finance ministry land and property assets will back the bonds.

* proceeds: will be used to finance the state budget.

* structure of contract: Ijarah sale-and-leaseback, where the sukuk is backed by the purchase, sale or lease of physical properties.

* maturity: the government can set the debt maturity and has previously said it is looking to borrow for seven to 10 years.

* return: fixed coupon rate

* the parliamentary working commission also approved the government's plans to issue the following instruments: long-term sukuk Al Ijarah, retail sukuk, Islamic treasury bills, sukuk for project financing, and exchangeable sukuk. ($1=9,154 rupiah) Sphere: Related Content

Thursday, July 10, 2008

Deutsche Post Completes €1 Billion Sale Leaseback of 1,267 Postal Properties Across Germany

Property Week - July 8, 2008

Lone Star has raised more than €700m (£556m) of bank finance for its €1bn (£795m) purchase of a Deutsche Post property portfolio in Germany.

Lone Star sealed the financing for the sale & leaseback with banks Eurohypo, Natixis, DekaBank and Societe Generale, yesterday. It provided the remaining €300m (£238m) itself.

The fundraising comes after the global private equity investor and fund manager agreed a deal to buy the 1,267 strong portfolio in April in the biggest commercial property deal seen in Germany this year. The deal was struck on behalf of its Lone Star Real Estate Fund.

The portfolio is split 70% mixed-use properties and 30% logistics properties and development sites. The mixed-use properties typically comprise ground floor retail with offices and residential space on top and are 16,000 sq ft in size on average.

The portfolio is spread across Germany with many of the properties in small town centres although some are in the suburbs of major cities such as Munich and Hamburg. The unexpired lease lengths in the portfolio vary from two to ten years.

Knight Frank advised Lone Star and Morgan Stanley advised Deutsche Post. Sphere: Related Content

Tuesday, July 08, 2008

Gilat Satellite Networks Seeking $70 Million Sale Leaseback of Two Office Building in Israel

Globes - July 6, 2008

Sources inform "Globes" that Gilat Satellite Networks Ltd. (Nasdaq: GILT; TASE: GILT) wants to sell its two office buildings for $70-80 million in sell and lease-back deals. The two properties are located in Kiryat Arie in Petah Tikva. The sources added that it has contacted Israel's top insurance companies -- Harel Insurance Investments and Financial Services Ltd. (TASE: HARL), Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), and Israel Phoenix Assurance Ltd. (TASE: PHOE1;PHOE5) -- about a deal.

The VSAT satellite communications equipment maker and services provider owns two of the four building in the Daniv Park in Kiryat Arie, which were built by Denisra International Ltd. in the late 1990s. Gilat purchased two of the buildings for its own use. Gilat is about to be sold to a consortia led by Gores Group LLC and Mivtach Shamir Holdings Ltd. (TASE:MISH). Sphere: Related Content

Friday, July 04, 2008

Barclays Completes EUR 65 Million Sale Leaseback of 24 Properties in Spain

Property Week - July 2, 2008

Redevco, the Dutch property company, has bought 24 Barclays banks for €65m (£51.5m).

The 24 banks and commercial buildings have been bought on a purchase and leaseback basis with Barclays on long term leases. The properties are located in prime retail high streets in nine Spanish cities including Madrid, Barcelona, Seville, Málaga, Vigo and Alicante.

Jones Lang LaSalle acted as intermediary in the deal. Redevco is part of a stable of companies owned by the family that founded retailer C&A. Sphere: Related Content

Thursday, July 03, 2008

AT&T Completes $285 Million Sale Leaseback of Lindbergh Center in Atlanta

Atlanta Business Chronicle - July 1, 2008

Wells Real Estate Investment Trust II has acquired Lindbergh Center in Atlanta's Buckhead submarket in a sale-leaseback from AT&T Inc.

Financial terms were not released.

Lindbergh Center has twin 14-story, class-A office buildings connected by a four-story atrium, totaling 955,000 square feet. It is at Piedmont Road and Lindbergh Drive, next to MARTA's Lindbergh station. The development is part of Lindbergh City Center, a 47-acre live/work/play development.

AT&T Services Inc. will continue to occupy 100 percent of the property under a new lease from Wells through 2020.

The deal marks Norcross, Ga.-based Wells REIT II's second recent acquisition from AT&T (NYSE: T) in Buckhead. In May, it bought a five-building, 1-million-square-foot office campus in Buckhead through a sale-leaseback.

"We said a month ago it was rare to acquire a million square feet of prime office property, fully leased to a world-class tenant, in the top submarket of a top-10 city," said Don Henry, chief real estate officer of Wells Real Estate Funds. "A month later, we've done it again."

(Note: SEC filing dated August 21, 2008 indicates a purchase price of $285 million and an initial annual rent of $19.9 million for an initial cap rate of approximately 7.0%.) Sphere: Related Content

Wednesday, July 02, 2008

HSBC May Unwind £1.1 Billion Sale Leaseback of Canary Wharf HQ

This is Money - June 29, 2008

HSBC is believed to have approached potential buyers for its skyscraper head office in London's Canary Wharf amid fears it might have to repossess the building from the Spanish property group that paid a record £1.1bn for it last year.

Metrovacesa, Spain's largest property company, is trying to refinance the £810m of short-term debt it took out with HSBC to buy 8 Canada Square, in what was Britain's biggest single building sale. Although the loan runs until November, Metrovacesa and the banking giant are thought to have wanted to thrash out a refinancing by the end of this month.

However, with lenders having shut up shop in the credit crunch, borrowings are hard to find.

If Metrovacesa, controlled by the Sanahuja family, cannot refinance, HSBC may take back possession of the 42-storey tower - its global headquarters since 2002. In recent weeks it has made approaches to possible buyers, including sovereign wealth funds.

If HSBC, which has been under attack from investment company Knight Vinke over its troubled US business, repossesses the building, it will be keen to sell it on quickly.

However, the appetite for major property deals has dried up and the bank's advances have been snubbed by at least one potential buyer. A spokesman for HSBC declined to comment. Under the terms of the deal with Metrovacesa, HSBC agreed to lease back the building for 20 years at an annual rent of £43.5m with an option to extend for a further five years.

In Metrovacesa's accounts for last year it had written down the value of the building to £1bn. The Sanahujas, who started their property empire in the Seventies in Barcelona, fought a tough battle for control of Metrovacesa in 2006. Sphere: Related Content

Fortis Enters EUR 94 Million Sale Leaseback of Two Office Buildings in Belgium

PropertyEU - June 30, 2008

Belgian property group Befimmo said it has acquired two buildings in Belgium from Fortis Bank for an overall purchase price of EUR 94mln.

The first building is located in Antwerp and comprises two technically independent wings over a total 21,253 m2. The Meir wing is a classic-style building let entirely to Fortis Bank for a term of 27 years while the Wapper wing is a contemporary building used as offices and a bank branch, whichis also let entirely to Fortis Bank for a term of 18 years. The other building is situated at Vital Decosterstraat 42-44 in Leuven and is three-quarters let to Fortis Bank on leases of 12 and 15 years. The rest of the second building is let to other tenants.

For Belgian-Dutch financial services group Fortis, the transaction came as it raised EUR 1.5bn through the issue of new shares and announced a number of other measures to shore up its finances. Fortis said these would also include a total of EUR 1.5bn in sale-and-leaseback transactions of real estate like the deal that was announced with Befimmo. Sphere: Related Content

Wednesday, June 25, 2008

Citigroup Seeking $500 Million Sale Leaseback of HQ & Property Portfolio in India - June 23, 2008

Reeling under the US bad loans crisis, Citigroup will raise around $500 million by selling some real estate properties in India, including its headquarters in Bandra Kurla Complex, Mumbai.

The company has appointed Jones Lang LaSalle Meghraj to do a valuation of the headquarters. It is also selling some corporate offices and prime residential properties in Mumbai, Delhi and Chennai. In Mumbai, it has already liquidated about 8 residential properties in the last one year. Recently, it sold a property here to a Bollywood actor for a whopping Rs 30 crore.

Industry officials said the company plans to sell the BKC headquarters and lease it back. When contacted by Financial Chronicle, chairman and country head of Jones Lang LaSalle Meghraj, Anuj Puri, refused to comment.

While Citibank plans to layoff around 2,000 people globally, its India operations are unlikely to face job cuts. Its investment banking division is growing here, with the firm having appointed Nalin Nayyar, formerly with Lehman Brothers, as a managing director in April.

Citigroup India's headcount has risen to over 22,000 from 21,000 a year earlier. It also hired a new head of mergers and acquisitions, Sameer Nath, who was shifted from Citigroup's US operations.

The company has stopped renting flats to employees. “Since the company plans to sell and lease it back, builders or developers may not be interested. People like high net worth individuals or private equity investors may buy this property,” said an official with IL&FS Property Manage-ment Services, the facilities management arm of IL&FS. Sphere: Related Content

Bank of America Nears $190 Million Sale Leaseback of Chicago Office Tower

Crain's Chicago - June 25, 2008

Bank of America Corp. is close to a deal to sell the former LaSalle Bank Building for roughly $190 million and lease back as much as two-thirds of the 1.2-million-square-foot landmark tower.

The Charlotte, N.C.-based banking giant is in final negotiations to sell the 44-story skyscraper at 135 S. LaSalle St. to New York-based AmTrust Realty Corp., according to sources familiar with the transaction. B of A inherited the Art Deco classic as part of last year’s acquisition of LaSalle Bank’s parent company.

A B of A spokesman confirmed the negotiations with AmTrust but declined to comment on the price. He also declined to comment on how much space the bank would lease, except to say that no jobs would be affected by the deal.

The bank currently occupies about 800,000 square feet in the building, according to real estate research firm CoStar Group Inc.

As a result of the deal, B of A will reduce its occupancy expenses and cut costs by getting out of the property management business for outside tenants, the spokesman said in an e-mail. “This transaction also would free up capital and allow us to continue to reinvest in our businesses,” he said in the e-mail.

B of A has offered to provide a loan to the winning bidder, sources say, a key boost to the deal at a time when many potential transactions are not moving ahead because of the difficulty of obtaining financing.

The deal could close as soon as next month. An executive with Chicago-based real estate firm Jones Lang LaSalle Inc., which is advising B of A in the sale, declined to comment.

The transaction is believed to be the second Chicago acquisition for AmTrust Realty, a low-profile real estate investment firm owned by brothers Michael and George Karfunkel.

In April 2004, Amtrust acquired 33 W. Monroe St., which once housed the headquarters of defunct accounting firm Arthur Andersen LLP. Since then, Amtrust has leased up the 879,000-square-foot building. The vacancy rate has dropped to 10.1%, compared to 67.1% when purchase was made, according to CoStar. Sphere: Related Content

Friday, June 20, 2008

MAXIMA Completes EUR 46.6 Million Sale Leaseback of Supermarket Portfolio in Lithuania

PR Inside - June 18, 2008

Re&Solution has acted as a sole advisor of the largest retail chain of food products and manufactured goods in the Baltic States MAXIMA in EUR 46.6 million supermarket portfolio sale and leaseback transaction

The Norwegian investment banking company VERDISPAR, representing its investors through the company VERDISPAR Retail Properties II, has acquired a 26,500 sq. m (285,300 sq. ft.) real estate portfolio from MAXIMA. Verdispar paid LTL 161 million (EUR 46.6 million) for nine supermarkets (MAXIMA X and MAXIMA XX) situated in the largest cities of Lithuania: Vilnius, Kaunas, Klaipeda, Alytus and Siauliai, as well as in Ukmerge and Plunge. MAXIMA will continue to do business in these supermarkets as the chain has signed long-term leaseback contracts with VERDISPAR. The transaction will be formally completed after it is approved by the Competition Council of the Republic of Lithuania.

Mr. Ricardas Cepas, Re&Solution partner said: 'time to buy commercial property in our countries is particularly attractive now. Increased costs of borrowing and significantly tightened credit policy have induced developers to start considering alternative financing opportunities, for example, forward funding or disposing of currently possessed assets. Moreover, quality of investment products has improved substantially compared to for example 2006/2007. The largest shopping centre developers and retail chains have started sales of their assets. The biggest shopping centre, one of the largest logistic hubs is on sale presently; the strongest retail chains consider JV and sale and lease back opportunities; the strongest developers search for development and financial partners. MAXIMA sale and leaseback transaction is an obvious proof of quality of available opportunities, thus we expect that the deal will encourage institutional investors to explore the region and investigate the best investment possibilities ever'.

The transaction was partly financed by SEB and Nordea banks. Sphere: Related Content

Tuesday, June 17, 2008

Imo Planning £60 million Sale Leaseback of Car Wash Properties Across Europe

Telegraph - June 15, 2008

Carlyle Group is heading for a showdown with debt investors of Imo, the world's biggest car wash company, as the private equity house revealed plans to dipose of the group's property assets to raise more money.

Carlyle, which is nick-named the ex-presidents' club for employing political heavyweights such as James Baker and John Major, has in recent weeks asked the debt investors of Imo to approve of a sale and lease back of car wash sites that would raise £60m. The debt investors are concerned about the proposals since the property is the main collateral for their investment.

One investor said: "This seems to be an effort on the part of Carlyle to use our security rather than put in more equity themselves. It is not satisfactory." Debt holders have been asked to approve the scheme in the next few weeks.

Carlyle wants to raise the additional money to fund an expansion plan of new car wash sites across Europe. The car wash company had a tough year last year after poor weather affected trading. Experts say that people are more likely to get their cars washed when the weather changes. Last year there were long periods of constant rain or sun.

This year the group says business has been strong so far. Even so Carlyle wants to build more sites to ensure a wider catchment area but needs additional funding.

Imo currently owns 900 car wash sites in 14 countries, that wash over 34 million vehicles each year. In the UK, Imo has 300 sites trading as Arc Clean Car Centres. The next biggest presence is in Germany where is has 335, with the remaining sites spread across 12 other countries.

Carlyle bought the group in 1996 from JP Morgan Partners. Previously it was owned by Bridgepoint Capital, which had led a management buy-in in 1998. The company was originally founded in Germany in 1965 and expanded to include sites in the UK, and throughout Europe. Sphere: Related Content

Saturday, June 14, 2008

Rexel Completes EUR 62 Million Sale Leaseback of Six Warehouse Distribution Properties in France

Rexel Web Site - June 12, 2008

Rexel France has concluded a sale-and-leaseback agreement with Gecina Group for seven logistics platforms located in specialized logistics hubs on major trunk roads. The transaction is part of the Rexel Group’s strategy of leasing its commercial and logistics sites so as to be able to continuously adapt its real estate portfolio to market evolutions.

This transaction reduces Rexel's debt by 62 million euros, of which 38 million euros were already reflected in the Q1 2008 consolidated balance sheet. The remaining 24 million euros will be accounted for in the Q2 2008 consolidated balance sheet.

These seven logistics platforms, which represent a constructed area of nearly 125,000 m², are located in Nancy (Champigneulles), Lyon (Saint-Vulbas), Marseille (Miramas), Toulouse (Tournefeuille), Nantes (Saint-Herblain), Rouen (Grand-Quevilly) and Orléans (Meung-sur-Loire).

Six of these platforms were leased back by Rexel France under a commercial lease, whilethe Saint-Vulbas platform will be transferred to a new, larger building in the same Plaine del’Ain logistics hub.

Rexel France was advised in this transaction by the property expert Schneider
International and the Field Fisher Waterhouse law firm. Sphere: Related Content

Friday, June 13, 2008

Nomura Agrees to £235 Million Sale Leaseback of London HQ

Property Week - June 13, 2008

Fund managers IVG Asticus and AAIM are under offer to buy Nomura House at 1 St Martin’s Le Grand in the City of London. The two parties have a two-week timetable in which to complete on the 275,000 sq ft building and lease it back to Japanese bank Nomura for around £235m at a yield of around 5%. Drivers Jonas advises Nomura.

All parties declined to comment. Sphere: Related Content

Thursday, June 12, 2008

Dine Equity Completes $337 Million Sale Leaseback of 181 Appleby's Restaurants

SEC Edgar Web Site - June 19, 2008

On June 13, 2008, Applebee’s Restaurants Kansas LLC, Applebee’s Restaurants Mid-Atlantic LLC, Applebee’s Restaurants North LLC, Applebee’s Restaurants Texas LLC, and Applebee’s Restaurants West LLC (collectively the “Tenant”) entered into a Master Land and Building Lease (the “Master Lease”) with DBAPPLEF, LLC (the “Landlord”) relating to 181 parcels of real property, each of which is improved with a restaurant operating as an Applebee’s Neighborhood Grill and Bar (the “Properties”).

The Master Lease calls for an initial term of twenty years and four five-year options to extend the term which are exercisable by the Tenant or its successors. The initial monthly base rent under the Master Lease will be $2,612,916.66. The initial monthly base rent is subject to a 2% increase on each of the following dates: January 1, 2009; July 1, 2010; July 1, 2011; July 1, 2012; and July 1, 2013. Thereafter, the monthly base rent shall increase by ten percent (10%) of the monthly base rent preceding such increase in base rent on each of July 1, 2018 and July 1, 2023. The Master Lease provides for rent adjustments during each of the option periods as well. Additionally, the tenant under the Master Lease is responsible for additional rent equal to any and all fees, expenses, taxes and other charges of every kind and nature arising in connection with or relating to the Properties.

The Tenant may sublease all or a portion of the Properties, without the Landlord’s consent, provided that certain conditions are met. In addition, the Tenant may assign its interest in the Master Lease with respect to some or all of the Properties, without Landlord’s consent, provided that certain conditions are met and the assignee agrees to enter into a direct lease with the Landlord on a pre-approved form attached to the Master Lease (“Assigned Leases”). Further, if such assignment is to a qualified franchisee meeting certain parameters set forth in the Master Lease, the Tenant shall be released by the Landlord from all obligations with respect to any Assigned Lease.

(Note: Transaction reflects an initial cap rate of approximately 9.3%.) Sphere: Related Content

Sunday, June 08, 2008

Volkswagen of America HQ Near Washington, DC Sold

Washington Business Journal - June 6, 2008

A German investment firm has purchased the local headquarters of Volkswagen of America Inc.

Union Investment Real Estate AG, a Hamburg-based investment management company, bought the Tishman Speyer-owned property, known as Woodland Pointe, for an undisclosed amount.

The 184,787-square-foot Class A property has been valued at $100 million. Last fall, Volkswagen signed a 15-year net lease to move its headquarters from Michigan this year. New York-based Tishman Speyer delivered the six-story building in January.

It is expected to be fully occupied by the end of the year, also housing the U.S. headquarters for Audi of America Inc., Audi Financial Services, Volkswagen Credit and other affiliated operations.

Union Investment Real Estate made the purchase due to the property's tenants, the proximity to Dulles International Airport and its visibility along the Dulles Toll Road, said Zeb Bradford, managing director of Metzler, Union Investment's real estate adviser in the U.S. The buyer made the acquisition for UniImmo, its global open-ended real estate fund.

Union Investment Real Estate is planning several other strategic acquisitions in the D.C. area this year, according to Bradford.

Tishman Speyer will continue to manage Woodland Pointe, which is located among 1.7 million square feet of office space in Woodland Park. Roy Bajtel, head of Union Investment's New York City office, represented the company in the negotiations. Drew Flood and Bill Collins of Cassidy Pinkard and Colliers brokered the deal. Sphere: Related Content

Monday, June 02, 2008

Kesko Completes EUR 31 Million Sale Leaseback of HQ & Logistics Property in Finland

Kesko Web Site - May 30, 2008

Kesko Corporation and the Kesko Pension Fund have sold the office and logistics property located at Tikkurilantie 10, Hakkila, Vantaa, to Aberdeen Real Estate Fund Finland in a transaction closed today. The price paid by the fund to Kesko and the Kesko Pension Fund totals about €31 million, of which Kesko´s share is about €10 million. The Kesko Group recognises a gain of about €4 million on the disposal, which will be reported as a non-recurring item in Rautakesko´s profit for the second quarter.

Rautakesko will continue as the principal user of the premises under a long-term lease. Approximately half of the premises have been leased to logistics companies outside Kesko. Premises not used by Kesko are not included in the leaseback system and the buyer will be responsible for them in the future. The total lease area of the property is about 26,000 m².

'The aim of the property disposal is to enhance the use of the Kesko Group capital. The proceeds will be used to strengthen the store network in Finland and abroad,' says Kesko´s Arja Talma, Senior Vice President, CFO. Sphere: Related Content

Brocade Communications Considering Sale Leaseback of $223 Million HQ in San Jose / - May 29, 2008

Brocade Communications is spending approximately $223 million on a new headquarters office complex on North First Street. The locally based public company currently keeps its headquarters at 1745 Technology Dr. on a lease that runs out in the middle of 2010.

In an SEC filing this week the provider of datacenter networking solutions says it purchased three unimproved building parcels from MFP/Hunter@First Office Partners LLC for $50.9 million. It retained an affiliate of the seller to develop three office buildings totaling 562,000 sf for an additional $173 million that will be paid in installments over the next 27 months.

The new campus will consist of two seven-story buildings and one four-story building and will have a capacity of approximately 2,200 people, allowing the company to consolidate not only its headquarters at 1745 Technology Dr. but also a building it owns several blocks away at Skyport Plaza. Brocade’s two existing local buildings total about 400,000 sf, a company source tells

With regard to the decision to buy or lease, a company source tells that the company evaluated both kinds of transactions and “found that this was very fiscally responsible and met our needs.”

Depending on the market or other circumstances, Brocade may evaluate entering into a sale-leaseback transaction with respect to the property and buildings at a future date, according to SEC documents. As part of the deal the company also obtained a four-year option to take down a fourth parcel totaling four acres for $26 million. Sphere: Related Content

Friday, May 23, 2008

Grupo Prisa Completes EUR 315 Million Sale Leaseback of Three Office Buildings in Spain

Cushman & Wakefield Web Site - May 21, 2008

Drago Real Estate Partners has today announced the signing of an agreement with Prisa to purchase a portfolio of office blocks comprising 3 buildings, two of these located in Madrid and one in Barcelona, belonging to the communications group. The operation will take the form of sale & leaseback and the amount agreed is 315 million Euros.

In late 2007, the Grupo Prisa announced the running of a competition to sell this property portfolio, comprising two buildings in Madrid: one located at Gran Vía 32 (the head office of the Grupo Prisa) and the other on Calle Miguel Yuste (the head office of the daily newspaper El País and other publications) and one building in Barcelona, located at Calle Caspe, 6 – 20 (the head office of Radio Barcelona). The portfolio includes a total of 71,873 m2 and 344 parking spaces, as well as various commercial premises in the building on Gran Vía, with prestigious tenants such as Zara, Mango, H&M and Sfera.

The purchase is to take place through a consortium led by Drago Real Estate Partners. The financing has been provided to Drago by the Banco Santander and the Bayerische Landesbank. The organisation Gómez-Acebo & Pombo has advised Drago Real Estate Partners, Uría y Menéndez has advised Prisa and Clifford Chance has advised the Banco Santander and the Bayerische Landesbank. CB Richard Ellis has advised Prisa in the sales process and Cushman & Wakefield has advised the buyer.

Drago Real Estate Partners is a property investment company which is managed by Mare Nostrum Capital Managers. Sphere: Related Content

Saturday, May 17, 2008

JC Penney Warehouse Near LA Trades for $36.1 Million / - May 15, 2008

A 440,538-sf single-tenant distribution center here has changed hands for $36.1 million, according to industry sources. An undisclosed client of UBS Global Real Estate acquired the 10-year-old development from FR/CAL Beta Northwest, LLC, a joint venture between First Industrial and CalSTRS.

Located near Interstate 5 within Crossroads Commerce Center, the warehouse was built in 1998 and substantially renovated for JC Penney in 2007. The building, 700 D’Arcy Parkway, has 32-foot clear heights and approximately 9,000 sf built out for office use. The 28-acre property includes eight acres of yard area for trailer parking.

JC Penney is currently paying a net rent on the warehouse of $4.23 per sf per year and another $1.19 per sf per year for the trailer parking lot, according to an industry source. The non-cancelable lease runs through 2023 and includes 6% compounding escalations every three years. JC Penney also is paying a 2% annual management fee.

The current net income from the property is $2.27 million. Given the $36.1-million purchase price, the initial cap rate on the transaction is approximately 6.3%.

“We started marketing the property in the September-October timeframe, right after the market had changed, when there was still a tremendous amount of uncertainty,” listing broker Andrew Sandquist of CB Richard Ellis tells “But this is an institutional quality asset in an institutional market that is net leased long term, and investors are still looking for high-quality product and are willing to pay for it. We’re very pleased with the result.”

Sandquist heads up CBRE’s national sale-leaseback group from his office in Chicago. Joining him on the listing were Robert Brennan and Jonathan Wolfe, also from Chicago, and Dave Haggerty of CBRE’s Stockton, CA office, in the disposition of 700 D’Arcy Parkway, Lathrop, CA. Sphere: Related Content

Friday, May 16, 2008

Vedici Group Enters EUR 73 Million Sale Leaseback of Two Health Care Facilities in France

PropertyEU - May 14, 2008

French property developer Icade has acquired two healthcare assets in Nantes for EUR 73 million from nursing home operator Vedici. The company bought the Polyclinique de l'Atlantique in Saint Herblain, France's leading maternity clinic with total capacity of 269 beds, and the Centre de Soins de Suite de Roz Arvor in Nantes with a capacity of 80 beds. The Vedici Group is leasing back the properties under a 12-year lease. Icade has a development portfolio of public and healthcare assets of about 205,000 m2. Other 158,000 m2 of space have already been brought to the market.

The French builder, which is chaired by Serge Grzybowski, added that it has been hired by Crédit Lyonnais’ bank LCL to construct its headquarters in Villejuif. LCL will rent back the Metropolitan office complex, which consists of 60,000 m2 of space across four buildings. The first asset is scheduled to be delivered in early 2009, while completion for the three others is expected for 2012.

In the beginning of May, Icade and its business partner ING Real Estate signed contracts with IVG to develop three buildings within the new Claude Bernard business park in the 19th arrondissement of Paris. The contracts are for the construction of 40,000 m2 of office space across three properties. Construction work is scheduled to begin in the first quarter of 2009, with completion in 2011. The company posted turnover of EUR 1.5bn in 2007. Sphere: Related Content

Sunday, May 11, 2008

AT&T Completes $275.2 Million Sale Leaseback of Atlanta Office Campus

Commercial Property News - May 9, 2008

Wells REIT II has acquired a five-building, 1 million-square-foot office campus in the Buckhead submarket of Atlanta, through a long-term sale-leaseback with AT&T. The campus will headquarter AT&T Wireless' operations in the city. The transaction's terms were not disclosed.

The property is located in the Lenox Park office park (pictured) on Lenox Park Boulevard, between Peachtree Road and Interstate 85. AT&T Services Inc. and its subsidiaries will occupy all five of the buildings under new leases running from 10 to 15 years. The buildings were constructed between 1992 and 2002 and range from four to 12 floors.

Jay Koster, senior managing director of Staubach Capital Markets, represented AT&T in the deal. Sphere: Related Content

Friday, May 09, 2008

Indian Overseas Bank Seeking Sale Leaseback of Bank Portfolio

Business Standard - May 7, 2008

High property prices have opened up new avenues for state-run banks to shore up their precious tier-I capital.

Chennai-based Indian Overseas Bank is planning to sell its properties to self-promoted special purpose vehicle, thus realising the entire profit and then ploughing it back to its Tier-I capital. IOB will do a leaseback deal of properties that it had sold to the SPV.

According to the bank's estimates, the prices of its property has appreciated nearly 200 per cent over the last couple of years.

IOB has sought the approval of the finance ministry for implementing the idea, according to a top bank executive. If approved by the ministry, the government-owned bank's profit will soar by Rs 6 billion ($140 million) and the amount will be ploughed back to its Tier-I capital.

Banks are allowed to use 40 per cent of the rise in assets valuation to accrue to their Tier-II capital. In the current case, however, the bank will show the transaction as a sale and not revaluation. Hence the entire value of the property is accruable to its Tier-I capital.

The move followed a substantial depletion in the bank's capital adequacy ratio in the previous financial year as it had to comply with Basel-II norms. The capital adequacy ratio of the bank was 11.13 per cent as on March 31 compared with 13.27 per cent in the same period a year ago. The Tier-I capital stood at 7.31 per cent.

Since the government owns 61.23 per cent in the bank, it can dilute its stake to 51 per cent to raise equity capital. However, the bank is not considering a stake dilution at this point of time, the executive said.

Indian laws allow the state-owned banks to dilute up to 49 per cent governmental stake to retail and institutional investors. Sphere: Related Content

Wednesday, May 07, 2008

Orpea Ponders Sale Leaseback on Part of EUR 1.2 Billion French Care Home Portfolio

PropertyEU - May 5, 2008

French nursing home group Orpea said it plans to outsource part of its real estate portfolio in the second half of 2008. The company said it is considering different options, including the sale-and-leaseback of some of its development assets to one or more investors, and the direct sale of a number of properties. A third option would be to transfer part of the portfolio to a new OPCI property investment fund in which Orpea would retain a minimum of 60%.

The company added that it has already been approached by a number of French and foreign investors regarding the assets, but would not disclose the name of the interested parties.

Orpea, which made the announcement during the presentation of its results for the 2007 year, said that its property portfolio has a market value of EUR 1.2bn, of which development assets make up for EUR 350mln. The portfolio comprises of 103 buildings, of which 41 are partially owned, located in or near large towns in France.

'This real estate strategy aims to maintain robust margins while controlling the impact of rents on operating performance, in order to pursue the group's value creation policy,' the company said in a statement.

Orpea expects to open 13 new facilities totalling about 1,200 beds in 2008. The company is currently renovating or developing nearly 7,000 beds which are expected to increase its activities by 50% over the next three years. Sphere: Related Content

Saturday, May 03, 2008

Citibank Completes $100 Million Sale Leaseback of 47 Bank Branches in New York City

Property Week - May 2, 2008

Dublin-based Markland holdings, jointly owned by Irish property entrepreneurs Sean Mulryan and Paddy Kelly, has made a $100m (£51m) New York purchase.

The investment and development group has bought 47 Citibank properties, which comprise bank branches and offices, across New York and the wider state that will be leased back to the bank. The price reflects a yield of around 6%.

Citibank will lease back the buildings for 15 years but has the right to occupy the properties for the next 30 years.

Markland Holdings is owned by Mulryan, founder of Ballymore, and Kelly, a fellow entrepreneur. It is run by managing director Aidan Scully. Mulryan first invested with Kelly in the late 1980s in Markland House Properties, before making his fortune with Ballymore in the 1990s.

Last year Ballymore International began equity raising through Irish stockbroker and investment bank Davy to raise more than €1bn (£785m) for overseas development and investments.

New York’s investment market is suffering from a seizure in debt markets and a stand-off between buyers and sellers that has resulted in a dramatic drop in sales – from $28.3bn (£14.3bn) during the first quarter of 2007 to just $5.1bn (£2.6bn) in 2008, according to Cushman and wakefield.

Markland could be trying to take advantage of this buyers’ market where UK and European investors can take advantage of the favourable exchange rate.

Savills Granite acted for Markland. Sphere: Related Content

Saturday, April 26, 2008

Empire Completes $428 Million Sale Leaseback of 61 Sobeys Grocery Stores Across Canada

Empire Company Web Site - April 22, 2008

Empire Company Limited (TSX: EMP.A) today announced that it and certain of its wholly-owned subsidiaries, including Sobey Leased Properties Limited (“SLP”), have closed the sale of 61 retail properties to Crombie Real Estate Investment Trust (“Crombie”). The properties represent approximately 3.3 million square feet of gross leasable area and consist of 40 freestanding grocery stores carrying various Sobeys banners and 21 strip plazas all of which are also anchored by Sobeys bannered grocery stores. The sale was previously announced by Empire on February 25, 2008.

The selling price in respect of the 61 properties was $428.5 million representing an effective capitalization rate of 8.12 percent before transaction costs. Empire received net cash proceeds on closing of approximately $271 million. The difference between the $428.5 million sale price and the net cash proceeds received on closing is related to funds used for the retirement of debt and for additional equity investment in Crombie, in addition to closing and transaction costs.

Empire has realized a pre-tax gain of approximately $165 million on closing of this transaction. The net cash proceeds from the transaction will be utilized by both Empire and its wholly-owned subsidiary, Sobeys Inc., to repay bank indebtedness. Immediately following this transaction, Empire indirectly has a 47.8 percent ownership interest in Crombie.

Empire is a Canadian company headquartered in Stellarton, Nova Scotia with approximately $13.8 billion in annual revenue and $5.9 billion in assets. Empire’s key businesses include food retailing and related real estate. Sphere: Related Content

Wednesday, April 23, 2008

Cramo Group Closes Sale Leaseback of Nine Properties in Finland

Aberdeen Property Fund - April 21, 2008

Cramo has signed an agreement on the sale of its real estate properties in Finland

Cramo Plc has signed an agreement on the sale of nine of its real estate properties in Finland to Aberdeen Property Fund Finland K Ky and one or several companies owned by Aberdeen Property Fund Finland I Ky, and on the simultaneous leaseback of the properties with an initial fixed term of 10 years.

The properties include the headquarters of Cramo Plc located at Kalliosolantie 2, Vantaa. the transaction is expected to be closed in the end of April 2008. The resulting capital gain is estimated at roughly EUR 3.9 million, to be booked in other operating income of the Cramo Group during Q2 2008.

"The sale of the real estate properties in Finland follows Cramo's strategy on focusing on its core businesses. The transaction will release capital for the Group's growth strategy in equipment rental and modular space, while at the same time release Cramo's balance sheet from non-core assets. Sphere: Related Content

Thursday, April 17, 2008

Tesco Enters $407 Million Sale Leaseback of Six UK Supermarkets

Property Week - April 15, 2008

Tesco, in its results for the year to 23 February 2008, revealed it had completed a £207m sale and leaseback deal with PruPIM at a 4.8% yield. (Tesco reportedly agreed to lease back the properties for 20 years with annual rent reviews linked to the Retail Prices Index and capped at 3.5 percent per annum.)

The deal is the third since Tesco revealed a new £5bn property plan last year which took the total earmarked for property sale and leasebacks and joint ventures to close to £9bn. It completed two transactions in 2007 which raised £1.2bn for the supermarket giant.

The first of these deals, with the British Airways Pension Fund, was a £445m deal completed at the end of the 2006/7 financial year. The second, a £650m deal with British Land, completed in March 2007.

Tesco said in a statement: ‘Whilst yields have increased modestly in recent months, appetite for Tesco's property and covenant remains strong, and if market conditions remain conducive, we expect to be able to complete further transactions on attractive terms in the months ahead. It added: ‘We are currently in discussion with potential counterparties.’

The proceeds from the property deals will be used to fund expansion and its share buy-back programme - which has so far re-purchased Tesco shares worth over £1.1bn.

The net book value of Tesco’s fixed assets is £19.8bn, up from around £17bn estimated last year. Most of this value is in its freehold store portfolio. It estimates the current market value to be £31bn, representing a 57% premium to book value. Sphere: Related Content

Friday, April 11, 2008

Australian Defence Housing Authority Defers Sale Leaseback Program

The Australian - April 10, 2008

The Defence Housing Authority plans to sell $200-300 million worth of housing to pension funds and institutional investors in the next six months. DHA managing director Michael Del Gigante said: "We are holding off because of the current credit crunch and the decline in the listed property sector. "We are watching the market and getting ready to hold another tender, probably in the next six months," he said. Mr Del Gigante expects liquidity to improve in time, allowing for DHA to go back to the market to raise capital.

The Authority made its first sale to an institution in 2006, when Westpac won the tender to buy 441 houses in two tranches for a total of $220 million, which seeded Westpac's first unlisted residential trust.

Some institutions were looking for up to a billion dollars worth of assets to set up residential funds, but Mr Del Gigante said DHA would not have enough stock in its inventory to meet their requirement. The authority produces 1500 new houses a year for sale and lease-back.

"In order to meet DHA's growing capital program, I expect the volume of sale and lease-back to grow to between $400 and $500 million a year in the next three to five years." Mr Del Gigante said DHA, set up two decades ago to develop and provide housing to defence personnel, had been raising between $300 and $400 million a year from the program.

However, sales dropped to $270-300 million this financial year because of the weakness in the market, so the DHA held off making a bulk sale. Between 60 and 70 per cent of its capital program is channelled into refurbishment and maintenance of its pool of 17,000 houses across Australia, which are worth about $6 billion.

DHA leases back properties for up to 15 years. The standard lease terms are nine or 12 years, with an option for a three-year extension. At the end of 15 years, the houses are usually redeveloped. Investors are able to resell the houses while they are still leased to DHA, but the lease has to be attached to the sale. Independent valuers set market-based rents for the properties. Currently, the rents range from $370 to under $700 a week, depending on the location and the state or territory. Sphere: Related Content

Sainsbury Completes £191 Million Sale Leaseback of Four UK Distribution Centers

Property Week - April 9, 2008

Sainsbury’s has completed a £191m sale and leaseback deal on four of its distribution depots.

The money raised by the deals will be invested back into the supermarket’s property portfolio.

The deals, tipped in Property Week (23.11.07), have now completed. The four sites are:

•Tamworth, 423,494 sq ft, sold to BAE Capital Pension Fund Trustees for £38.5m

•Stoke, 561,203 sq ft sold to Canada Life for £40m

•Haydock, 626,624 sq ft sold to clients of Mutual Finance for £42.7m

•Hams Hall, 783,344 sq ft sold to Christian Vision for £70.1m.

All four deals have been secured on 25 year leases to Sainsbury’s with an average yield of 5.74%.

The move forms part of Sainsbury’s plans to actively manage its estate to ensure it maximises the value of each property.

Peter Baguley, Sainsbury’s property director said: ‘These are great deals for us and demonstrate the attractiveness of the Sainsbury’s covenant as we have managed to secure competitive terms during a set of very difficult market conditions. ‘It also demonstrates our continued commitment to supporting our operating business through delivering the active property strategy we set out a year ago.’

He said that the supermarket was also looking at options for a number of its other sites, particularly at the potential for redevelopment.

He added: ‘Where we have done as much as we can with a site, we see no reason to hold it freehold – it’s a dry asset. We’ve found that there’s a hardcore of good demand for good assets – not as much as a year ago but it’s still there.’

Sainsbury’s were advised on the deal by Cushman & Wakefield. Kitchen LaFrenais Morgan advised BAE; Atisreal advised Canada Life; Morgan Williams advised Mutual Finance and CGBA advised Christian Vision. Sphere: Related Content

Thursday, April 10, 2008

Amcol Enters $34 Million Build-to-Suit for New HQ Near Chicago

Crain's Chicago Real Estate Daily - April 7, 2008

Arlington Heights-based Amcol International Corp. is moving its headquarters to a new building in the Prairie Stone Business Park in Hoffman Estates in a $33.57-million sale/leaseback deal.

Amcol, an industrial clay processor, has been headquartered since 1987 at 1500 W. Shure Drive in Arlington Heights, where it leases about 48,000 square feet, says Gary Castagna, Amcol's chief financial officer.

Adjacent to that building, the firm also leases 18,000 square feet of research and development space at 1350 W. Shure Drive, he says.

Amcol bought the land for its new headquarters, a 72,000-square-foot building at 2370 Forbs Ave. in Hoffman Estates. The company sold the site to Boston-based CRIC Capital LLC, a joint venture between Prudential Real Estate Investors and Corporate Realty Investment Co. The venture is constructing the building. Amcol hopes to move in by Nov.1, Mr. Castagna says.

As part of the deal, which closed March 12, Amcol agreed to lease back the completed two-story building for 20 years. Mr. Castagna says the move allows the company to consolidate its offices and research facility into one building.

"It just seemed like the right setup for us," he says.

CRIC Capital paid about $466 per square foot for Amcol's new building in Prairie Stone, the 780-acre mixed-use development near Interstate 90 and State Route 59 in Hoffman Estates. Marjorie Palace, a managing partner at CRIC Capital, couldn't be reached for comment.

CRIC financed the transaction with a $33.57-million loan from Greenwich Capital Financial Products Inc., a subsidiary of Edinburgh, Scotland-based Royal Bank of Scotland Group PLC. Sphere: Related Content

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