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

Wednesday, April 09, 2008

SunTrust Completes $736 Million Sale Leaseback of 433 Bank Branch Portfolio

Cityfeet / - April 7, 2008

Two affiliates of Inland Real Estate Group of Cos. Inc., based here, have completed the third and final closing of two portfolios for a total of $736 million from SunTrust Bank, a subsidiary of SunTrust Banks Inc., headquartered in Atlanta. The two affiliates acquired a total of 433 triple-net lease properties with nearly 2.3 million sf. Inland Real Estate Acquisitions Inc. recently closed on the final portion of the two portfolios, which includes 143 single tenant, triple-net lease properties for $230 million.

The affiliates had previously closed on 218 properties on Dec. 10, 2007 and 72 properties 10 days later, says Joe Cosenza, president of Inland Real Estate Acquisitions. The cap rate for the acquisition of the two portfolios is approximately 7.25%, Cosenza tells

There are 159 locations in Florida, 74 locations each in Georgia and North Carolina, 43 locations in Tennessee, and 12 locations in South Carolina with the rest in Alabama, Maryland, Virginia and Washington, DC, Cosenza tells Inland paid $93.7 million in cash and received a $281.2 million loan from LaSalle Bank NA, according to a filing with the US Securities and Exchange Commission on the portfolio acquisition. The interest-only loan matures Dec. 10, 2008, according to the filing.

SunTrust was looking to sell the portfolios for the same reasons a lot of banks and corporations are doing the same, Cosenza says. SunTrust did not want to “hold or own all of this real estate when the only thing you can do on your books is depreciate it every year,” he says. SunTrust builds approximately 40 to 50 branches each year. “Some of this money was actually put into a tax deferred exchange so they can apply it to the new facilities they are going to be building,” he says.

The majority of the properties in the two portfolios are retail bank facilities that are between 2,000 sf and 6,000 sf, Cosenza says. There are eight bank locations that also have some office space that average between 10,000 sf and 13,000 sf, he says. Additionally, there is a 78,308-sf data center in Virginia.

SunTrust Bank will lease all of the retail bank facilities for 10 years, with a 10-year renewal option and then subsequent five-year renewal options. The average rent is $23.34 per sf net with an annual 1.5% base rent increase, Cosenza tells Inland was interested in the portfolio because “I have smaller type properties, in almost every case, (that) I can re-lease to any number of tenants who would love this kind of drive-up facility, including other banks,” Cosenza says.

Inland considers SunTrust a quality tenant. “We have over $25 billion in deposits at these locations,” Cosenza says. “These are very healthy retail branch locations.” SunTrust is also a subsidiary of a company with an S&P credit rating of AA- and that has “more than $18 billion in stockholder equity and they had virtually no sub-prime loans,” he says. Sphere: Related Content

Saturday, April 05, 2008

Bank of America Seeking Sale Leaseback of Chicago Landmark

Commercial Property News - April 3, 2008

Bank of America Corp. is reportedly putting the 135 S. LaSalle St. building in Downtown Chicago on the block. If all goes according to plan, the bank will then lease back the space it occupies in the building--most of its total of 1.25 million square feet.

The building, one of the last built in Chicago before the Great Depression put a halt to commercial development in the city for many years, had previously been owned by ABN AMRO, former parent of Chicago-based LaSalle Bank. When the consortium of Fortis N.V., The Royal Bank of Scotland Group plc and Banco Santander Central Hispano, S.AU.K. bought the Dutch ABN AMRO last year, part of the deal was the sale of LaSalle Bank (along with the building) to San Francisco-based Bank of America.

According to a report in the Chicago Tribune, Bank of America has a long-standing policy of selling off real estate it acquires during its frequent M&A activity, and then leasing the space back for continued operations. Bank of America Corp. has hired Jones Lang LaSalle Inc. to take the property to market.

The prospect of such a major Central Loop office property on the market comes at a time of a lull in investment sales in Chicago that's attributed to the credit squeeze. Still, office space absorption and occupancy rates have been up in Downtown Chicago recently, which may bode well for attracting buyers for a building such as 135 S. LaSalle.

According to Grubb & Ellis Co., some 2.3 million square feet of Downtown Chicago office space was absorbed in 2007, the most since 2001. Vacancies stand at 13.3 percent in the Central Loop--the lowest of any Downtown submarket, and tied with North Michigan Ave.--and at 13.9 percent in the Loop as a whole. Sphere: Related Content

Rexel Enters Sale Leaseback of Warehouse Portfolio in France

Gecina Web Site - April 3, 2008

GECINA is acquiring four logistics platforms in France from REXEL, representing a total surface area of nearly 76,000 sq.m.

This acquisition is part of a sale and leaseback operation with REXEL FRANCE, a subsidiary of the REXEL group, the world's leading distributor of electrical equipment, and is combined with the signature of commercial leases.

The four logistics platforms, located in Nancy-Champigneulles (East), Rouen-Grand-Quevilly (Normandy), Orl€ans-Meung-sur-Loire (Center) and Marseille-Miramas (South) offer surface areas from 15,800 sq.m up to around 26,000 sq.m. These assets are all located in key logistics centers and on major transport hubs.

GECINA has also signed a firm agreement with a view to acquiring a further three platforms from REXEL FRANCE shortly, with a total surface area of approximately 48,000 sq.m. Sphere: Related Content

NHS Ponders Multi-Billion Pound Sale Leaseback of London Hospitals

Times Online - April 5, 2008

Ministers have begun a review of London NHS property in a move that could lead to the sale of some or all of the capital’s biggest hospitals to raise billions of pounds for new projects.

The Times has learnt that the London strategic health authority, which includes the 31 primary healthcare trusts in the city, has hired investment bankers to advise it on the options. The NHS has one of the largest property estates in Europe, valued at more than £23 billion.

In London the huge and ageing property portfolio comprises nearly 100 hospitals and hundreds of smaller sites, which together cost £700 million a year to maintain. The review follows Gordon Brown’s plan to reap billions from selling off a swath of the Government’s £337 billion of assets.

The capital has 32 large acute hospitals, and 206,000 doctors, nurses and other NHS staff are deployed in the city. If the London NHS review proved successful, the model could be replicated across other NHS healthcare trusts around the country. “They are sitting on all this property and it is all such a waste,” one source said.

The most likely London options would include the Government selling off some of the prime hospital real estate in a process known as “sale and leaseback”, which would leave the NHS trust paying rent to the new owners for the continued lease of the building. Another option being considered is “securitisation”, where the Government would bundle together packages of buildings and use them as collateral to raise money in the markets, although that would leave the Government with a huge pile of debt.

But it is not just hospitals that are attractive for potential investors. The Times was told that the NHS was also sitting on vast plots of unused land and outbuildings that could be handed over to developers. Sphere: Related Content

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