Thursday, December 31, 2009

Ferrovial Enters EUR 40 Million Sale Leaseback of Madrid HQ

Construction & Maintenance - December 29, 2009

Ferrovial, the Spanish infrastructure group, signed a sale-and-leaseback agreement on its corporate headquarters building with a Spanish property investor. The deal amounts to 40 million euros.

Ferrovial will remain as a tenant for twelve years, with an option on two 5-year extensions. Ferrovial also has the right of first refusal if the buyer decides to sell the building in the future. Today's agreement culminates a process that commenced in September when Ferrovial mandated a property manager to explore the market.

Ferrovial's headquarters is located in Madrid at Calle Príncipe de Vergara, 135. The 8,549 square meter building was inaugurated in 1989; it has seven floors above grade and two basement car parks with space for 100 cars.

The sale is aimed at optimizing Ferrovial's cash flow by raising funds for investment in new business opportunities. Sphere: Related Content

Saturday, December 26, 2009

Whitbread Agrees to £36 Million Sale Leaseback of Five Hotels in UK

Whitbread Web Site - December 24, 2009

Whitbread, the UK's largest hotel and restaurant group, announces today that it has exchanged agreements with M&G Investments for the sale and leaseback of five properties operating as Premier Inn and adjacent restaurants.

On completion, which is expected in January 2010, M&G Investments will pay £36.65 million in cash for the properties and enter into 25 year leases with Whitbread, who will continue to operate the properties. This represents a net initial yield of around 5.5%.

Whitbread remains committed to having a predominantly freehold asset base, while selectively using its property as an alternative source of funding for its pipeline of new developments. Sphere: Related Content

Wednesday, December 23, 2009

Elmec Agrees to EUR 40 Million Sale Leaseback of Store in Greece - December 23, 2009

Elmec Sport announces that its fully owned subsidiary and under a merger procedure 'FACTORY OUTLET S.A.', signed today a sale and lease back agreement jointly for 50% each with 'Emporiki Leasing S.A.' and 'EFG Eurobank Ergasias Leasing S.A.' for the owned building where FACTORY OUTLET department store operates in a surface of 13.000 sq.m. The total funding reaches the amount of 40 mn euro.

This agreement lasts for 15 years and the monthly installments are connected with the 3M Euribor plus an additional spread. The inflows from the said agreement will be used primarily to pay off short term loans and secondly to finance the current business plans of the Group. Sphere: Related Content

Kesko Completes EUR 156 Million Sale Leaseback of 13 Stores in Finland

Kesko Web Site - December 22, 2009

The Kesko Group has today sold 13 retail store properties in different parts of Finland to Varma Mutual Pension Insurance Company. The debt-free selling price of the properties is €156 million. The Kesko Group's gain on the sale is €63 million, which will be treated as a non-recurring item in Kesko's fourth quarter operating profit. In the same connection, Kesko Pension Fund has sold one property owned by it.

All of the above properties have been leased back for use by Kesko's division parent companies under 5-15-year leases with extension options. The lease liability for the real estate sold by the Kesko Group totals €142 million, not classified as a finance lease.

Out of the 13 Kesko Group's properties included in the sale, eight are used by K-food store chains, three by K-rauta, one by the Anttila department store chain and one by VV-Auto. The transaction does not involve changes to the stores' operations. The total area of the properties sold by the Kesko Group is 111,000 m².

At 31 December 2008, Kesko owned 1.0 million m² of properties and had 2.9 million m² of properties on leasehold in Finland and other Nordic countries, the Baltic countries and Russia. Kesko's store site investments were €279 million in 2008. Sphere: Related Content

HSBC Enters $573 Million Sale Leaseback of Paris Office Buildings

Reuters - December 21, 2009

Europe's largest bank, has sold its Paris offices for 400 million euros ($573 million) to private investors represented by French Properties Management, completing the sale of three properties worldwide.

HSBC France, a HSBC Holdings unit, has agreed to lease the buildings at 103 avenue des Champs-Elysees and 15 rue Vernet for nine years, with break clauses in the fourth, fifth and sixth years, the bank said in a statement on Monday.

Over the past two months, HSBC has sold its European headquarters at London's Canary Wharf to South Korea's National Pension Service for $1.3 billion, and its New York City building to Isreal's IDB Holding Corp (IDBH.TA: Quote, Profile, Research) for $330 million.

HSBC said the Paris agreement would be completed in the first quarter of 2010, subject to conditions, with a subsidiary of a French OPCI (Organisme de Placement Collectif Immobilier) established for the transaction.

The deal was conditional on the City of Paris not exercising its right of pre-emption to buy the buildings in the two-month period immediately after the agreement, HSBC said. Sphere: Related Content

Tuesday, December 22, 2009

Rave Cinemas Completes $121 Million Sale Leaseback of 15 Theatres in Eight States

Kansas City Business Journal - December 21, 2009

Entertainment Properties Trust has acquired a portfolio of 15 theaters for about $121 million, the company said in a Monday release.

The theaters will be leased back to an affiliate of their operator, Rave Cinemas LLC, through a master lease agreement, the release said. The master lease includes a term of 20 years with four five-year renewal options and is structured so the tenant is responsible for all costs associated with the properties.

The theaters include a total of 231 screens with 52,731 seats within 1.25 million square feet of space. They are in Connecticut, Massachusetts, New Jersey, Virginia, Kentucky, Ohio, Michigan and Iowa.

(Note: An SEC 8-K filing dated November 11, 2009 stated that the master lease was expected to have an initial base rent equal to the product of the purchase price multiplied by 12%, and provide for escalators every 5 years.) Sphere: Related Content

Saturday, December 19, 2009

Home Depot Distribution Center in Topeka, KS Sold For $23.5 Million

SEC Edgar Database - December 16, 2009

On December 11, 2009, American Realty Capital Trust, Inc. acquired a leasehold interest in a build-to-suit Home Depot Distribution Facility that will service Home Depot stores in the Kansas City region (the “Home Depot Facility”). The Home Depot Facility is a “Rapid Deployment Center” of approximately 465,600 square feet located in Topeka, KS. The aggregate purchase price is approximately $23.5 million, inclusive of all closing costs and fees. The primary lease term under this net lease arrangement is twenty years, having commenced simultaneous with closing, and provides for two extensions of successive five-year terms. The average annual base rent over the initial lease term is approximately $2.2 million.

The purchase price is comprised of a combination of proceeds from the sale of common shares and proceeds received from a four-year non-recourse, fixed-rate first mortgage loan totaling approximately $13.7 million. The first three years of the loan are considered the initial term with a fixed interest rate of 6.25%, and the loan includes a one-year extension option at an interest rate of 6.50%.

The Home Depot Facility is net leased to Home Depot U.S.A., Inc. (“Home Depot”) pursuant to which Home Depot will be required to pay all operating expenses and capital expenditures in addition to base rent, simultaneously with the acquisition of the properties, and have a primary lease term of 20 years. Annual rent is approximately $1.8 million for the first year of the initial lease term (7.65% initial yield), which increases 2% annually. The lease provides for two extensions of successive five-year terms. Sphere: Related Content

Friday, December 18, 2009

Occupiers Sold on Sale and Leasebacks

Property Week - December 18, 2009

What do General Motors, Marks & Spencer and HSBC have in common?

These corporate giants carried out some of the most notable sale and leasebacks of the past 10 years.

Occupiers’ motivations for sale and leasebacks in the 2000s varied. In 2001, gym chain LA Fitness took that route for its 37 gyms so it could double its property portfolio and venture into the Spanish market.

Similarly, baa Lynton, the commercial property division of airport operator BAA, sold and leased back a 15 acre site in 2002 to fund the development of Heathrow’s Terminal 5.

The supermarkets, each vying to become the dominant chain, were behind some of the biggest sale and leasebacks of the decade.

Sainsbury’s started in 2000, when it sold 10 stores for £226m to an offshore special purpose vehicle.

Topland Group had its hands full as buyer of a £348m purchase and leaseback of 78 Marks & Spencer shops in 2001 and then a £675m portfolio of 33 Tesco properties and distribution centres in 2002.

As the decade drew to a close, occupiers turned to sale and leasebacks to raise much-needed cash in the credit-starved world of the global financial crisis.

“It was and always has been a cheaper source of debt,” says Julian Lyons, European property director at General Motors, which last year was aiming to raise €200m from the sale and leaseback of its European property assets.

“The past decade has seen occupiers undertake sale and leasebacks sometimes as a pure liquidity play, or with a slack in the economy when money is scarcer. The other reason is simply when an occupier realises that the cost of capital tied up in property is not part of their strategy any more.” Sphere: Related Content

Thursday, December 17, 2009

JPMorgan Chase Agrees to $109 Million Sale Leasebak of 4 New York Plaza

The Real Deal - December 17, 2009

JPMorgan Chase is in contract to sell 4 New York Plaza for $108.9 million, or $99-per-square-foot, the Post reported. The buyers of the 23-story, 1.1 million square foot building are Harbor Group International, a real estate company based in Norfolk, Va., and Josh Zamir's Capstone Equities, which owns and operates more than 8 million square feet, including 14 Wall Street and 156 William Street. An e-mail written by Zamir and obtained by the Post revealed that JPMorgan, which had also been previously looking to sell One Chase Manhattan Plaza, would lease back 75 percent of the building at Broad and Water streets for 15 years. The bank is hoping to collect $1 billion in total on the sale of a portfolio of 23 office buildings in eight states. [Post] Sphere: Related Content

Monday, December 14, 2009

Travelodge Launches £100 Million UK Sale Leaseback Program

BigHospitality - December 14, 2009

Travelodge has launched a £100m joint property fund with Twenty10 Fund Management to continue the growth of its budget hotels in the UK.

The fund, which will consist of £50m equity, £50m bank debt and a £500k investment made by Travelodge, will as of 2010 be used to fund the budget hotel chain’s aim to open 600 more hotels by 2020.

Targeting new developments as stand alone properties and mixed use schemes, Travelodge will primarily use the fund to open five new hotels in London and other major UK cities every year, each of which will be leased back to the group on 25-35 year leases.

Paul Harvey, managing director of development at Travelodge, said the fund would enable the group to continue with their UK growth drive.

“This funding will ensure that we are more nimble and enable us to capitalise on opportunities that are presented to us without an investment partner,” he said. “We are now establishing ourselves as the number one hotel brand in many of the country’s largest cities and this new fund will push our growth even further.”

The venture with Twenty10 Fund Management comes six months after Travelodge launched a similar £100m fund with Meghraj, named Tamesis Capital, to acquire 8-14 going concern hotels.

Travelodge, which currently operates 28,000 rooms in 385 hotels, will account for 10 per cent of the total accommodation available in the UK when it reaches its operational target of 70,000 rooms in 10 years time. Sphere: Related Content

CVS/Caremark Arranges $745 Million Lease Financing for Sale Leaseback of 166 Drug Stores

Another Financial Portal - December 14, 2009

Based on information received through December 8, 2009, Moody's Investors Service assigns a provisional (P) Baa2 rating to $744.9 million of CVS/Caremark Lease-Backed Pass-Through Certificates, Series 2009-B, to be issued by a trust that will acquire 166 first-priority lien commercial mortgage, credit-tenant lease loans.

The loans will be secured by mostly newly constructed drug stores and related realty that will be triple-net leased to subsidiaries of CVS/Caremark Corporation ("CVS"). Each of the leases will be bondable and guaranteed by CVS, and bankruptcy-remote, special purpose borrowers will own each of the fee or ground-leased properties. The loans mature in January 2032.

Fixed net rent under the leases will be sufficient to pay in full all interest and principal of the loans. The 166 drugstores are located in 34 states.

In rating this transaction, Moody's used its credit-tenant lease ("CTL") financing rating methodology ("CTL approach"). Under Moody's CTL approach, the rating of a transaction's certificates is primarily based on the senior unsecured debt rating (or the corporate family rating) of the tenant, usually an investment grade rated company, leasing the real estate collateral supporting the bonds.

This tenant's credit rating is the key factor in determining the probability of default on the underlying lease. The lease generally is "bondable", which means it is an absolute net lease, yielding fixed rent paid to the trust through a lock-box, sufficient under all circumstances to pay in full all interest and principal of the loan. The leased property should be owned by a bankruptcy-remote, special purpose borrower, which grants a first lien mortgage and assignment of rents to the securitization trust.

The dark value of the collateral, which assumes the property is vacant or "dark", is then examined; the dark value must be sufficient, assuming a bankruptcy of the tenant and rejection of the lease, to support the expected loss consistent with the certificates' rating. Moody's may make adjustments reflecting the possibility of lease affirmations by the tenant and for the landlord's claim for lease rejection damages in bankruptcy. Moody's also may give credit for some amortization of the debt, depending upon the rating of the credit tenant. In addition, Moody's considers the overall structure and legal integrity of the transaction. The certificates' rating may change as the senior unsecured debt rating (or the corporate family rating) of the tenant changes.

(NOTE: Reuters reports that the coupon on the 22 year fully ammortizing notes was 7.507%.) Sphere: Related Content

Friday, December 11, 2009

CB Richard Ellis Hired by California for $2B Sale Leaseback Deal - December 11, 2009

The California Department of General Services (DGS) has awarded a contract to CB Richard Ellis Group, Inc. (NYSE:CBG) to sell 17 state office buildings to investors.

DGS plans to sell the commercial real estate during the first half of 2010 and then enter into long-term leases with the new owners. The state will continue to maintain nearly 100 percent occupancy in all the buildings; this provides an opportunity for investors in a market that normally offers similar properties with an average vacancy rate of up to 20 to 30 percent.

In June, Governor Schwarzenegger directed the sale of the properties located in Los Angeles, Oakland, Sacramento, San Francisco and Santa Rosa in order to raise more than $660 million to offset cuts in the state budget.

CBRE has already begun marketing the properties to investors in the global capital markets. The 11 properties range from the 97,000 square foot Judge Joseph A. Rattigan Building in Santa Rosa, to the LEED Gold Certified Capital Area East End Complex in Sacramento and the 24-story, 863,000 square foot Elihu M. Harris Building in downtown Oakland.

CBRE earned the contract for the brokerage services with the state after competing alongside five other companies. Sphere: Related Content

US Oncology HQ Near Houston Sold for $45 Million - December 11, 2009

Investment firm W. P. Carey & Co. LLC (NYSE: WPC) announced today that CPA:17 - Global, one of its publicly held non-traded REIT affiliates, has purchased the corporate headquarters of US Oncology, Inc. in Woodlands, Texas, 30 miles north of Houston. CPA:17 - Global purchased the 204,000 square foot facility, which is leased to US Oncology on a long-term basis, for a total of approximately $45 million.

US Oncology, majority-owned by private equity firm Welsh, Carson, Anderson & Stowe, is a premier oncology services company and works closely with physicians, payers, biotechnology, pharmaceutical and medical equipment manufacturers to support every aspect of the cancer care delivery system, from drug development to distribution and outcomes measurement. According to its third quarter 2009 earnings report, US Oncology is affiliated with 1,310 physicians operating in 493 locations in 39 states. Sphere: Related Content

Detention Facility and Police Building Under Construction in Sweeden Pre-Sold for $175 Million

RTT News - November 17, 2009

Skanska (STO:SKAB) has entered into an agreement to sell two ongoing projects, a detention center in Sollentuna outside Stockholm and a police building in Toftanas outside Malmo. The combined floor space totals 40,600 square meters, making it one of the largest property transactions in Sweden this year.

The buyer is a consortium of pension funds belonging to seven leading Swedish companies, namely Atlas Copco, Apoteksbolaget, Ericsson, Sandvik, Skanska, Stora Enso and Volvo.

Skanska's investment in the two properties amounts to SEK 1.25 billion. It is estimated that approximately 65 percent of the investment will have been completed by the end of 2009. In accordance with Skanska's information policy, the sales gain for commercial development properties under construction is not disclosed. The development gain is reported quarterly in pace with completion of the project. Possession of the properties will be taken upon completion of the projects in autumn 2010.

"The transaction clearly demonstrates Skanska's ability to utilize the Group's collective expertise in the areas of construction, project development and financing. I cannot imagine a better example of a win-win situation - the purchasers receive fully leased properties with stable and long-term tenants, public authorities and users gain access to state-of-the-art premises and Skanska's shareholders take satisfaction from construction and development gains," says Johan Karlstrom, Skanska's President and CEO.

Skanska's financial specialist unit Skanska Financial Services took the initiative to gather the pension funds and create the new consortium that is making the property investment.

"For us at Skanska's pension fund, there has long been an interest to invest in modern properties with stable tenants and long leases. When we put the question to other major Swedish pension funds it was revealed that they shared this interest," says Jonas Granholm, manager of Skanska's pension foundations.

The detention facility in Sollentuna is being developed and is owned by Skanska Sweden. It constitutes part of a newly established judicial center for northern Stockholm and is adjacent to the police headquarters and the new district court in central Sollentuna. The building, which includes administrative premises and a detention center, comprises a total of approximately 23,600 square meters. Construction began in January 2008 and the building is scheduled for transfer in September 2010. The entire property is leased to the Swedish Prison and Probation Service on a 25-year contract.

The police building in Malmo is being developed and is owned by Skanska resund, which is part Skanska Commercial Development Nordic. The police building for operating units in Malmo is located in Toftanas, about seven kilometers east of central Malmo. The building, comprising approximately 17,000 square meters, houses offices, garages, workshops and a sports center. Construction started in September 2008 and it is scheduled for completion in June 2010. The entire property is leased to the Police Authorities in Skane on a 25-year lease. Sphere: Related Content

Thursday, December 10, 2009

AIC Ventures Starts New Sale Leaseback Investment Fund

Austin Business Journal - December 1, 2009

AIC Ventures has begun to acquire assets for a new real estate trust through its subsidiary, NL Ventures VIII LP.

The Austin-based company invests in a diversified pool of single-tenant, net leased office, industrial and warehouse real estate throughout the country. For its latest trust, the company will make about 25 acquisitions for NL Ventures VIII and will consider properties valued from $3 million to $40 million. Two assets are scheduled to close prior to year end.

The new investment fund, the company’s eighth, has been in the planning stages for the past year.

“This time of economic uncertainty has created compelling investment opportunities for our funds,” said David Steinwedell, managing partner of acquisitions. “We are completing the acquisitions for our seventh fund and are very pleased to be able to continue to provide capital to middle-market companies through sale-lease back and net leased transactions. This type of financing effectively turns a company’s bricks and mortar into working capital. We particularly appreciate the confidence our investors have, once again, placed in us.”

The properties acquired by the new fund will be structured as absolute net leases, where the tenants maintain operational control of the real estate while gaining immediate access to capital. Typically, tenants use sale-lease back agreements to reduce debt or help fund corporate growth, among other things. Sphere: Related Content

Shoppers Drug Mart Agrees to $30 Million Sale Leaseback of 12 Retail Properties Across Canada

CNW Telbec - November 16, 2009

Scott's Real Estate Investment Trust (TSX: SRQ.UN) ("Scott's REIT") announced today that it has signed a purchase agreement with certain wholly owned subsidiaries of Shoppers Drug Mart Corporation (TSX:SC), Canada's largest retail drug store chain, to acquire 12 retail properties across Canada. The $30-million sale and leaseback transaction, subject to satisfactory completion of due diligence and other customary closing conditions, is scheduled to be completed by the end of the year.

Throughout the tight credit markets, Scott's REIT has demonstrated the strong performance and financial flexibility needed to pursue strategic acquisitions, while maintaining stable, consistent cash distributions to its unitholders. Over the past four years, the REIT has created a successful and sustainable business model by focusing solely on "small-box" retail properties less than 50,000 sq. ft. With this acquisition Scott's will have completed more than $100 million in profitable acquisitions since its IPO, making it one of the industry's top performers.

"In 2005, we recognized an opportunity to build a profitable niche market in Canada by focusing primarily on small-box properties," said Bitove. "This acquisition further validates the success of that strategy as we continue to expand beyond the quick-service restaurants to include strong national tenants in growth industries such as pharmacies, banks and other reliable sectors."

Once the acquisition is complete, Scott's REIT will own a portfolio of 219 retail properties in seven provinces across Canada. Under the terms of the agreement, Scott's REIT will purchase a total of 148,169 sq. ft. of single and multi-tenant retail space in Nova Scotia, Quebec, Ontario, Manitoba and Alberta. The properties are leased long-term to Shoppers Realty Inc. and are tenanted by Shoppers Drug Mart, Pharmaprix and Shoppers Home Health Care stores. Sphere: Related Content

Saturday, December 05, 2009

Carillion Completes Sale Leaseback of UK Support Center

Property Week - December 4, 2009

Carillion has leased the 42,000 sq ft building back on a 15 year term to relocate its National Support Centre from Rotherham.

John Platt, managing director of Carillion Facilities Management, said: “This new location will be a key element of the strategy for Carillion in the development of a centre of excellence for customer communication centres.”

Councillor Colin Ross, cabinet member for employment, enterprise and development at Sheffield City Council said: "The sale of the offices is a substantial investment in what are difficult market conditions. The move reduces vacant office space and is part of what has been generally a good year for take up of space in contrast to most other cities. The move brings jobs to the city with potentially more to follow."

Carillion was represented by Jones Lang LaSalle and Crossland Otter Hunt, while Chris Freer-Smith Limited acted for Threadneedle. Sphere: Related Content

Minerva Seeking £41 Million Sale Leaseback of London HQ

Property Week - December 4, 2009

Minerva is in talks to sell its head office in London’s West End for around £41m to Standard Life Investments

The company plans to lease back the offices at 42 Wigmore Street, north of Oxford Street. The neighbouring 5 Welbeck Street, which is included in the sale, is let to government department the Rent Service.

On Wednesday the London developer urged shareholders to reject an £84.5m offer from South African entrepreneur Nathan Kirsh, calling it “opportunistic” and “wholly inadequate”.

Minerva’s response circular to shareholders showed its portfolio was valued at around £1bn at the end of November, lifting its net asset value to 95p a share — nearly double the 50p-a-share bid.

The £1bn valuation from CB Richard Ellis reflected net growth of £93m since the end of June, equivalent to an increase of 10% in five months.

Minerva’s shares rose 12.7% to 62p on Wednesday, valuing the company at £100m.

“What is particularly opportunistic about the timing of this bid is that it comes after we have done the hard yards and just as we are beginning to see the turn,” chief executive Salmaan Hasan told a conference call.

“We are not going to give away Minerva, having done all the work, just as the market improves in the shareholders’ favour.”

Kirsh and entities related to his KiFin investment vehicle own a 29.9% stake in Minerva. Sphere: Related Content

Friday, December 04, 2009

Novo Nordisk Office Building In Princeton Sold for $51.5 Million

NJRealEstateRama - November 4, 2009

Dividend Capital Total Realty Trust Inc., a diversified real estate investment trust (REIT), announced today that it acquired a class-A office property located in Princeton, NJ — centrally located between New York City and Philadelphia. The property totals approximately 167,000 square feet and is currently 100% leased to Novo Nordisk Inc. — a healthcare company that manufactures and markets diabetes care products worldwide.

“This acquisition presents an opportunity for us to enhance the portfolio’s core office holdings with a Class-A property in what we believe is a prestigious Northeast market, while simultaneously diversifying the portfolio’s tenant base with a large pharmaceutical company,” said Guy Arnold, president of Dividend Capital Total Realty Trust Inc. “In addition, the tenant has 13 years remaining on its current triple-net lease, which is guaranteed by its parent company and should generate a dependable long-term cash flow. By entering what we believe is an attractive office market — with numerous corporate headquarters due to the central location in the Northeast — we are able to continue to execute our strategy of acquiring high-quality assets at attractive pricing.”

The property was developed by Patrinely Group, LLC and owned in a venture between Patrinely Group’s parent company, Crimson Capital, Ltd., and USAA Real Estate Company.

(Note: The most recent 10-Q report for Dividend Capital Total Realty Trust Inc. lists the total cost of the building as $51.1 million plus acquisition-related expenses.) Sphere: Related Content

Tuesday, December 01, 2009

Deutsche Telekom Completes EUR 29 Million Sale Leaseback of Office Complex in Leipzig

Globes Online - November 29, 2009

Ashtrom Properties Ltd. (TASE:ASPR) and Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) have bought an office complex in downtown Leipzig, Germany from Deutsche Telekom AG (NYSE: DT; XETRA: DTEG) in a buy and lease-back deal for €29 million (about NIS 164 million).

A Deutsche Telekom subsidiary occupies 96% of the 36,500-square meter three-building complex, and stores rent the rest. Annual rent totals €2.38 million a year, giving a return on investment of 8.8%. Deutsche Telekom's lease runs through the end of 2018, and has four five-year options to extend. Sphere: Related Content

Sunday, November 29, 2009

Citibank Bay Area Sale Leaseback of Bank Branches Winding Up - November 26, 2009

Citibank came to market with 17 of its Bay Area retail branches last fall offering 10-year leasebacks with up to 3% annual rent increases based on the CPI. Marketed by CB Richard Ellis, all but a couple of the well-located former CalFed branches quickly had signed LOIs from high-net-worth investors looking for an inflation hedge. The closings didn’t go quite as smoothly due to the financial meltdown in the fourth quarter but 13 of them closed this year at an average cap rate of 6%, with the first seven selling at a 5.8% cap rate on average.

“It was a huge undertaking getting that many [sales] going at once,” CBRE retail investment sales specialist Don LeBuhn tells “But they were the best locations so the intrinsic value was there and even though it took a long time to close deals due to the deteriorating economy [which took Citibank’s stock price from $19 to less than $1 while the properties were on the market] the buyers stuck with their prices, with most using 50% bank financing.”

The bank branches range in size from 3,000 square feet to 7,000 square feet and are located in several Bay Area markets including Burlingame, San Mateo, Los Altos, Palo Alto, San Jose, Santa Clara and Sunnyvale. One of the two remaining properties, a branch in Millbrae, closed last week at a 6.5% cap rate. The other should be under contract within a week or so, also at a sub 7% cap rate, says LeBuhn, a vice president with CBRE’s private client group.

All of the transactions were under $5 million, where LeBuhn says there is “tremendous velocity” because thanks to a lot of people who have $1 million or $2 million to invest and have not done well in the stock market in recent years. “They’re thinking I can put this down on a piece of real estate that has built-in annual rental growth and a steady income-producing tenant,” he says.

Moreover, LeBuhn says properties of this size, quality and price are achieving much better cap rates than more expensive deals requiring more equity. “When you get up to $10 million an above it’s highly unlikely you can get even close to a 6% cap rate; it will be more like 7.5% to 8.5%.”

“The yield curve based on pricing steepens dramatically as you ramp up toward $10 million,” explains LeBuhn’s partner, CBRE managing director Trevor Thorpe. “It’s the impact of the capital markets; the greater the equity the greater the risk premium that is required.”

“Ultimately these properties could have been sold as a portfolio at a mugh higher cap rate,” LeBuhn says. “Citibank wanted to maximize their return and we accomplished that for them.” Sphere: Related Content

Saturday, November 28, 2009

Clarian Health Secures $190 Million Lease Financing for New Indiana Medical Campus - November 24, 2009

Clarian Health Partners Inc. has secured $190 million in financing for the proposed Clarian Saxony Medical Center Campus here. Cain Brothers’ Real Estate acted as Clarian’s financial advisor in the deal and also managed to secure a build-to-suit construction leaseback, long-term ownership deal for Clarian.

The Herrick Co. Inc. provided the financing. The real estate investment firm, which has been in operation since 1960, has been involved in more that $3 billion worth of transactions.

Plans for the medical center campus have been in the works for years, with the first sketch of the project going before the public in November of 2007. Without financing the first phase, estimated to cost $180 million, has been stalled. But with the construction and ownership capital in place, Clarian was able to move from the planning phase to actual construction.

This first stage provides for the construction of a 200,000-square-foot forty-bed hospital and urgent care center, and a 100,000-square-foot medical office building. HKS was the architect on the project. Turner Construction and Harmon Construction are join venturing on the construction.

The campus will be built within the 725-acre Saxony mixed-use development in Hamilton County. In 2007, the project was estimated to be worth $750 million and would add one million square feet of retail, 3.5 million square feet of office/industrial and 1,300 residential units. Sphere: Related Content

Friday, November 27, 2009

CBRE - European Sale and Leasebacks Special Report

CB Richard Ellis European Web Site - November, 2009

Corporate sale and leasebacks represent a viable, effective and competitive way of securing capital in an age when cash flow is all-important and the stigma of ‘selling off the family silver’ is a fast-retreating myth.

Our research into this sector of business tells us that the climate has never been better to reap some of the many advantages of a sensibly conducted sale and leaseback of appropriate property. The outlook is positive – so we believe this is a good time for Corporate Treasury to take advantage of this growing opportunity.

The acceptability of the sale and leaseback route was helped by the ‘watershed’ moment when the €1.6 billion HSBC headquarters deal was completed in London in 2007. Other large deals – such as the sale of KarstadtQuelle’s €4.5 billion department store portfolio across Germany – only served to secure sale and leaseback activity’s place in the headlines.



BTicino Completes EUR 23 Million Sale Leaseback of Office Building in Milan

PropertyEU - November 23, 2009

Italian property company Beni Stabili said it has signed an agreement to acquire the D tower of the Procaccini business park located in Via Messina, Milan, for a total of nearly EUR 23 mln, including transaction costs of EUR 3 mln. The transaction reflects a gross yield of around 7%.

The office scheme, offering 7,100 m2 of gross leasable space, was acquired by the Milan-listed property company through a sale-and-leaseback agreement with BTicino. The seller will occupy the scheme under a seven-year lease agreement, with an option for a further six years.

The transaction includes around 50% of equity and a mortgage loan of approximately EUR 15 mln provided by Germany's Dekabank. Beni Stabili already owns another of the four towers in the business park. Sphere: Related Content

Wednesday, November 25, 2009

AIB Completes €19 Million Sale Leaseback of Seven Bank Branches

Irish Independent - November 25, 2009

AIB has sold seven branches across north Leinster for a combined €19m in seven separate deals. The total proceeds are close to the €20m target which agents CB Richard Ellis had been seeking when they launched them in June.

The most recent of the branches to sell is that in Monaghan which achieved in excess of €2.5m and close to the quoted price. With a rent of €200,000, it is generating a yield of 7pc. This is slightly higher than the average yield achieved across the seven branches of 6.9pc.

The seven branches are located in Swords, Navan, Dundalk, Monaghan, Kells, Castleblaney and Maynooth.

AIB is committed to a 20 year lease on each branch with a five year break clause and upward only rent reviews every five years. The purchasers of the Navan branch will achieve the highest of the rents €335,000. The purchasers are all investors rather than developers. Two of the purchasers are expected to farm out a share of the investments in two of the branches. Sphere: Related Content

Sunday, November 22, 2009

Investors Look to Sale and Leaseback

The Sunday Business Post Online - November 22, 2009

Corporate sale and leasebacks represent a viable, effective and competitive way of securing capital in an age when cash is all-important.

The stigma of ‘selling off the family silver’, which had been associated with this practice, is now a fast-retreating myth.

The acceptability of the sale and leaseback route was helped by the watershed moment when the €1.6 billion HSBC headquarters deal was completed in London in 2007, along with the sale of Karstadt Quelle’s €4.5 billion department store portfolio across Germany.

Closer to home, both Bank of Ireland and AIB have undertaken substantial sale and leasebacks of their headquarter properties and branch networks.

The first obvious reason that sale and leaseback represents an attractive option is that there has been very little capital available in recent times, largely because of the limited availability of bank credit.

Other key advantages are that it allows a corporate body to raise capital through the business - but unlike a loan, this capital does not have to be paid back, can be cheaper than placing a corporate bond or raising equity and meets the interest of shareholders.

In an environment where conventional forms of finance have become severely restricted and prohibitively expensive, sale and leaseback transactions represent a viable alternative for raising capital through and for the business.

This is evidenced by the fact that sale and leaseback activity experienced rapid growth in recent years, from a €6.9 billion market in Europe in 2004 to €46 billion - and more than 750 separate transactions - in 2007.

This represented a 585 per cent increase over four years, and such disposals went from comprising just 6 per cent of the European investment market in 2004 to nearly 20 per cent in 2007.

In 2008, falling values reduced the relative attraction and volume of asset sales, so occupier disposals in Europe effectively halved in value to €22.5 billion. However, this still comprised some 794 transactions and maintained the sector’s 19 per cent share of the total investment market.

In the first half of this year, an exceptionally quiet period for investment turnover, a further €4.1 billion in occupier disposals accounted for around 17 per cent of the market. These figures reinforce CBRE’s view that sale and leasebacks have established themselves as an important part of the property investment market.

This is because sale-and-leaseback transactions generally create long and well-secured income streams for the purchaser - precisely the kind of investment many are looking for in the current, more risk-averse climate.

In terms of sectors, certain other patterns are emerging. The retail sector has continued to increase its share, accounting for just over 50 per cent of occupier disposals in the first half of 2009, with offices accounting for 23 per cent and industrial 9 per cent.

This is something of a turnaround: office disposals accounted for almost half of all European sale and leaseback transactions in 2007, dropping to 31 per cent in 2008 as retail and manufacturing started to become a growth sector.

Interestingly, in the first half of this year Spain and Italy led the way, with Italy accounting for the largest transaction value, at 24 per cent of the European market. This largely reflects the disposal of a portfolio of 180 high street bank branches by Unicredit for €530 million.

This was followed by Spanish banks Caixa Catalunya and BBVA, totalling €251 million, and BNP Paribas with €250 million in Paris.

CBRE’s research has found that many investors are returning to the property market having invested relatively little in the last few years. The current focus is on the main European markets such as Britain, France and Germany. However, Ireland is now appearing on investors’ radar screens on the basis of offering good value.

Sale and leasebacks are inherently attractive to these investors in offering a secure income stream on a new lease. A good example is the AIB branch on Grafton Street, which offers an opportunity to acquire a prime retail investment on secure terms.

More generally, the potential for continued growth in sale and leaseback activity is immense:

the value of European real estate assets still in the hands of corporates is estimated at around €2.25 trillion, 12 times the average level of European real estate investment turnover over the last five years. It therefore represents a real and present opportunity. Sphere: Related Content

Premier Inn Seeking £30 Million Sale Leaseback of Five UK Hotels

Property Gazette is reporting that Whitbread is seeking to raise around £30 million on the sale leaseback of five of its 584 Premier Inns to gauge market interest. BNP Paribas Real Estate has been retained by Whitbread to conduct the sale. Premier Inns will reportedly offer 25-year leases on the properties plus additional renewal option. A successful transaction at an attractive initial yield will likely lead to further Premier Inn sale leaseback opportunities in the near future. Sphere: Related Content

Griffin Capital Launches Net Lease REIT - November 19, 2009

With its securities registration effective earlier this month, Griffin Capital Corp. has rolled out its new investment vehicle, the GC Net Lease REIT Inc.

The publicly registered, non-traded REIT will purchase both sale-leasebacks directly from corporate occupiers and existing net lease assets from third parties, though its preference is for sale-leasebacks, since those allow the REIT to structure its own leases. It is targeting “mission critical office and industrial properties that are net leased to corporate tenants for long duration,” says Griffin Capital president Kevin Shields.

It’s those kinds of assets—diversified by tenant credit quality, industry, geography, lease duration and property type—that will provide “a very stable return dynamic for us and our investors,” Shields tells

While Griffin Capital management had considered launching a net lease REIT a few years ago, it ultimately waited until this year. One main reason for shelving the REIT earlier was the low cap rate environment in which properties were selling. To be able to pay shareholders a reasonable dividend, properties would need to be purchased in the range of 8.65% to 8.7% caps, says Shields. “At the end of ’07, there was nothing you’d want to own at that kind of cap rate,” he adds.

Today, however, Shields says he sees the return of asset pricing that makes sense, and expects attractive buying opportunities ahead. “We see some pretty frothy opportunity in the sale-leaseback market going forward, because given the capital constraints for every corporate borrower out there, the opportunity to do a sale-leaseback transaction appears to be progressively more appealing” to corporate America, he says.

GC Net Lease REIT’s management team is currently looking at several potential deals, at least one of which Shields hopes to have closed by the end of the year. But unlike most non-traded REITs, GC Net Lease REIT has launched already owning two properties, which were contributed by Griffin Capital principals and represent about $55 million in value, including more than $20 million of equity.

The assets, which Shields says are indicative of the kind of assets the REIT intends to buy going forward, have both recently undergone renovations and extended their absolute net lease leases. One is a 176,025-square-foot office and laboratory facility in Plainfield, IL used by Chicago Bridge & Iron Co. on a 15-year lease that expires in 2022; the other is a 565,206-square-foot distribution facility in Clinton, SC, occupied by Renfro Corp. on a 12-year lease that expires in 2021. Both have rental increases and renewal options.

“Our initial property contributions help support our current dividend,” says Griffin Capital national sales director David Ford. “We are very excited to be bringing this product to the marketplace at this point in the real estate market cycle.”

GC Net Lease REIT’s registration allows it to raise $750 million of equity over the next couple of years, and it can be re-filed in the future to sell even more shares. To start, Shields says he expects to raise $100 million in 2010, which could translate to a couple hundred million dollars of properties. And ultimately Griffin Capital’s objective is to raise as much as $3 billion of equity over a seven-year period, building a portfolio of $5 billion to $6 billion of assets in the process and eventually listing the REIT on an exchange, he says.

Griffin Capital has been investing in the net lease property market going back to 1996. In more recent years, it has been a sponsor of investments structured as tenant-in-common and Delaware Statutory Trust programs, with both single-tenant and multi-tenant assets. Single-tenant properties account for about one-third of its current $1 billion of owned and managed assets. Sphere: Related Content

Bickford Senior Living Closes $28.25 Million Sale Leaseback of Five Assisted Living Facilities in MI & IL

SEC Edgar Web Site - November 19, 2009

National Health Investors, Inc. (NYSE:NHI) announced today it has closed a $28.25 million purchase/leaseback transaction with Bickford Senior Living and its affiliates (“Bickford”) involving four assisted living facilities in Michigan and one in Illinois. The assisted living communities are two to three years old totaling 216 units and attract 100% private payment for services. The purchase price was funded from NHI’s accumulated cash liquidity and includes $3 million in contingent payments to be made over the next three years based on Bickford’s expected achievement of certain operational measures. The five facilities are being leased to Bickford over 15 years at an initial lease rate of 9.5% plus annual fixed escalators. Bickford Senior Living, headquartered in Olathe, Kansas, operates over 40 assisted living, independent living and memory care facilities in Kansas, Iowa, Illinois, Indiana, Missouri, Nebraska and Michigan. The purchase/leaseback of the Bickford facilities brings NHI’s total 2009 year-to-date new investments in long-term care real estate and mortgages to $88.6 million. Sphere: Related Content

IDS Logistics Agrees to $28 Million Sale Leaseback of Seven Warehouses in Malaysia

The Star Online - November 20, 2009

Axis REIT Managers Bhd (ARMB) has proposed to buy seven warehouses in Klang and Seberang Prai for RM96mil from IDS Logistics Services (M) Sdn Bhd.

ARMB said in a statement the sale and leaseback deal comprised five warehouse buildings located in Bukit Raja, Klang, on two pieces of freehold land, while two more were in Seberang Prai, Penang, on separate pieces of leasehold land.

The acquisition was for a total cash consideration of RM71.75mil and RM24.25mil respectively, it said.

The Klang property is located in Bukit Raja Industrial Estate, a premier industrial zone in that area.

The Penang properties are located within the largest industrial estate in northern Peninsular Malaysia, the Prai Industrial Estate Phase 4, about 15km from the Butterworth Ferry Terminal and Railway Station.

The deal comes with a 15-year fixed lease agreement with an option to renew for a further 15 years with IDS Logistics, the current owner and operator. (The monthly rentals will reportedly be be RM666,666.67, resulting in an initial annual yield of approximately 8.3%.)

IDS Logistics is a wholly-owned subsidiary of Hong Kong-based Integrated Distribution Services Group Ltd, a logistics services provider and a member of the Li & Fung Group.

The lease agreements come with an agreed step-up in rental every three years over the 15-year period.

On completion of the acquisition, the fund will, for the first term of the lease, receive RM8mil a year in gross income.

ARMB chief executive office and executive director Stewart Labrooy said the acquisitions would provide a steady income and contribute positively to its earnings next year.

These new acquisitions will also see the company’s assets under management rise to over RM900mil. Sphere: Related Content

Thursday, November 19, 2009

Toys 'R' Us to Issue $650 Million in Lease Backed Notes

Fitch Ratings - November 9, 2009

Fitch Ratings has assigned an Issuer Default Rating (IDR) of 'B-' to Toys 'R' Us Property Co. II, LLC (previously known as Giraffe Holdings, LLC) and rates Toys 'R' Us Property Co. II, LLC's new $650 million senior secured notes 'B+/RR2'. The notes are secured by first-priority liens on 129 properties held in a bankruptcy-remote entity with a Master Lease covering all the properties, which requires Toys Delaware to pay all costs and expenses related to the ownership, operation, leasing and maintenance of the properties. In addition, while the property company currently does not have any subsidiaries, the notes will benefit from guarantees by any future subsidiary of the property company. Proceeds from the offering, an intercompany loan and a cash contribution from Toys 'R' Us, Inc. (TOY), as well as the release of restricted cash and cash on hand will be used to repay the existing $600 million Giraffe Holdings CMBS facility and $200 million MPO Holdings CMBS facility.

Fitch has also affirmed the following ratings:

Toys 'R' Us, Inc.
--IDR 'B-'
--Senior Unsecured Notes 'C/RR6'

Toys 'R' Us - Delaware, Inc.
--IDR 'B-'
--Secured Revolver 'B/RR3'
--Secured Term Loan 'CC/RR6'
--Unsecured Term Loan 'CC/RR6'
--Senior Unsecured Notes 'CC/RR6'

Toys 'R' Us Property Co. I, LLC (previously known as TRU 2005 RE Holding Co.)
--IDR 'B-'
--Senior Unsecured Notes 'B+/RR2'

Toys 'R' Us Europe, LLC (previously known as Toys 'R' Us (UK) Ltd.)
--IDR 'B-'
--Secured Revolver 'B/RR3'

The Rating Outlook is Stable. TOY had $5.6 billion in debt outstanding on Aug. 1, 2009. Sphere: Related Content

Wednesday, November 18, 2009

Blog Update......Finally

Finally, at long last, I am getting around to updating my blog. Most readers have assumed it was dead, joining the hundreds or perhaps thousands of other well intentioned efforts to provide meaningful content to a faithful following. The truth is I have been following the industry and capturing news all along in “draft” form for the benefit of those I work for or advise. (You cannot provide expert advice without adequate market research.) But I have found it difficult to find the time to refine each post or search for the most revealing or insightful source for each story.

Most people grossly underestimate the time commitment that a blog requires. I try to provide readers with links to news articles that provide the greatest level of transaction detail and insight possible on transactions that “move the needle” ($20 million or greater.) I try to avoid press releases and articles that are nothing more than marketing fluff. But this has become increasingly difficult in a media environment where journalism budgets have been drastically cut and some of the better news I uncover is only available for a fee. This makes maintaining this blog a very time consuming endeavor, and one that takes a “back seat” to the more pressing demands of livelihood and family.

You may notice a disproportionate number of news stories covering European companies as I update this blog. That’s because Europe is where the “action” is now and has been for some time. European companies own a disproportionately larger share of their occupational real estate than their U.S. counterparts. They have been monetizing real estate assets at very rapid pace lately with banks clearly leading the pack. I foresee this trend continuing for some time to come.

I will make a concerted effort to keep this blog as current as it is informative. Please send me any news links you uncover about significant sale leaseback or net lease transactions that would be of interest to readers.

Best Regards,
Sphere: Related Content

Sunday, November 15, 2009

Tesco Accelerates Sale Leaseback Program to Meet Market Demand

Property Week - November 13, 2009

Tesco has begun the next phase of its £5bn sale-and-leaseback programme to take advantage of the surge in the investment market.

The supermarket giant is bringing forward its next tranche of properties to the market to capitalise on the current bubble of large numbers of buyers chasing a scarcity of stock.

Tesco is thought to have presented up to £1bn of property to investors, although it may sell this in a number of smaller chunks.

A Tesco spokesman said: “There is good interest in sale and leasebacks at this time. Funds are back looking for the right deal with cash to invest, particularly on properties let to strong covenants like Tesco. We are talking to people on our next deal.”

It is thought that yields for the Tesco properties have even dipped below 5.3%, the level at which its last tranche of properties transacted.

Greg Nicholson, chairman of UK capital markets at CB Richard Ellis, said: “Prime shop yields have seen a 0.75% yield improvement from 6% to 5.25% over the last 12 months but for prime supermarkets, this yield shift has been even more marked — a 1% yield shift from 6% to 5% over the last six months. The supermarket retail asset class has more depth today and, often, there are more than 10 bids for any property that comes to the market.”

Tesco raised £637m from its portfolio in September through a £559m securitisation of 17 properties — 15 supermarkets and two distribution warehouses — by selling commercial mortgage-backed securities at a price of gilts plus 220 basis points.

It also completed the sale and leaseback of two food stores in Hertfordshire and Oxfordshire with LaSalle Investment Management for £78m, a yield of 5.29%.

Julian Stocks, Jones Lang Lasalle’s head of UK capital markets, said: “In the last few months we have switched from lots of overseas buyers in London and the UK to the retail funds and REITs who have now joined the party.

“Demand is very strong and a lack of vendors and lack of stock is pushing prices up, perhaps at a time when the occupational market is still weak.”

Tesco announced in April 2006 that it was embarking on programme to raise money from its vast property portfolio through joint ventures and other transactions. It has since met with success, selling large portfolios and forming joint ventures with buyers including Prupim and British Land.

Morgan Williams advises Tesco. Sphere: Related Content

Thursday, November 12, 2009

AIB Seeking EUR 30 Million Sale Leaseback of Bank Branch in Dublin

The Irish Times - November 11, 2009

Allied Irish Bank is to sell its most valuable high street property in Ireland.

The Dublin city centre bank branch with dual frontage onto Grafton Street and Wicklow Street is expected to be bought either by a cash-rish Irish investor or a British or German property fund.

Colm Luddy of CB Richard Ellis confirmed yesterday that his agency is “discreetly” marketing the sale and leaseback and said there were already a number of expressions of interest. “This is without doubt one of the best pieces of real estate on the street and, coupled with a long secure lease, is exactly where the investor interest is in the current market.”

No guide price has been suggested to date but investment experts expect that the price could be between €28.37 million and €30.7 million – reflecting an initial yield of 6 to 6.5 per cent.

The bank will obviously be hoping to get the best possible price in order to set an enhanced valuation benchmark on the street before it passes over €24.6 billion in toxic loans and €7.1 billion in associated loans to the State rescue bank Nama. AIB could not be seen to be holding on to one of the most valuable retail buildings in the city centre while seeking a State bail-out.

Investors pitching for the AIB branch will be conscious of the 6.4 per cent yield set only weeks ago when the German banking group DekaBank bought the Tommy Hilfiger store on the opposite side of Grafton Street for around €25 million.

The AIB investment will have a broader appeal because of the strength of the covenant and the potential for opening up a major new store of around 464sq m (5,000sq ft) on the ground floor, or two separate retail operations on Grafton Street and Wicklow Street in the unlikely event of AIB moving out.

AIB is due to pay a rent of close to €2 million for the bank branch under a 20-year lease with a break option in year 15. The L-shaped banking hall near Weir Sons, the jewellers, is easily the busiest of its branch network in the city centre and has three and four storeys of overhead offices.

AIB has sold off much of its branch network in recent years, arguing that it was unlocking shareholder equity for its core business. The disposal programme has become more important in recent months because of the liquidity problems facing all banks. Yields on bank branches have been rapidly creeping up since AIB started offloading branches at the peak of the property market in the autumn of 2006. The first 12 branches – including some of the best in the country – were bought in one lot by property developer Gerry Gannon for around €100 million and showed an initial return of only 2.8 per cent. The most recent tranche of branches sold by the bank gave investors yields of between 6.25 and 7.25 per cent. Early in 2006 AIB also sold its Ballsbridge headquarters, to property developer Sean Dunne, and Hibernian Life and Pensions for €377.7 million. Sphere: Related Content

AXA Corporate Services HQ in Paris Sold for $95 Million

Wall Street Journal - November 12, 2009

Property developer Tishman Speyer Properties is expected to announce Wednesday that one of its investment funds had acquired the Paris office building that houses the headquarters of AXA Corporate Services for roughly $95 million.

Tishman has acquired the building from SCI Vendome in a sale-and-lease-back arrangement. Located near the Gare Saint-Lazare train station in central Paris, the building has served as corporate headquarters for various units of French insurer and asset manager AXA SA since it was built in 1910. AXA Corporate Services, which is the only tenant, will remain in the building and has agreed to a nine-year lease, Tishman said.

The sale is a sign that Tishman is able to do deals despite the problems it has had with some of its investments in the U.S., such as the CarrAmerica office-building portfolio in Washington, D.C., and the Stuyvesant Town and Peter Cooper Village apartment complex in Manhattan. The developer, which owns such landmarks as Rockefeller Center, does many of its deals through investment funds that it has raised.

The 140,000-square-foot office building is being purchased by Tishman Speyer's European Core Fund, which owns office buildings throughout Europe.

The deal, one of the larger office transactions in the French capital this year, is typical of the kind of commercial-office property sought in Paris. The building is in the Haussmannian style, named for the 19th-century city planner who created the characteristic appearance of the buildings in central Paris.

"Financing is hard to come by so it's all about equity players, and everyone is looking for this kind of building," said Vincent Bollaert, partner in the capital-markets unit of property services group Cushman Wakefield in Paris. "This is quite a big deal for Paris." Sphere: Related Content

US Theatre Chain Negotiating $135 Million Sale Leaseback of 19 Movie Theatres - November 12, 2009

Entertainment Properties Trust is negotiating a letter of intent with what it describes as “a prominent theatre operator” for a $135-million sale-leaseback, according to a filing with the Securities and Exchange Commission this week. In addition, the locally-based REIT, which trades under the ticker EPR, is in discussions with a tenant regarding the purchase of several more charter school properties and is raising new equity for what its C suite has termed “growth transactions.”

The contemplated theatre deal involves 19 properties with 291 screens, 67,000 seats and 1.56 million square feet of space combined, according to the Nov. 10 filing. If the transaction is closed, EPR expects the properties to be leased to the theatre operator under one master lease, structured as a triple-net lease with an initial 20-year term and an initial base rent equal to the purchase price multiplied by 12%, plus rent escalators every five years. “The theatre operator is currently negotiating with a third party for the purchase of the theatres,” the filing states. “It is anticipated that [EPR] would acquire the theatre properties directly from the third party and lease them to the theatre operator.”

Meanwhile, the same filing discloses that EPR is discussing an option to buy as many as five charter schools from Imagine Schools Inc. The purchases as well as plans to invest in the expansion of a charter school the REIT already owns, is estimated to total $50 million.

During the company’s third quarter earnings conference call last week, EPR executives alluded to possible transactions in the theatre and charter school property markets, saying they have been spending a lot of time looking at deals in the 11% to 12% cap rate range. The deals are generally coming from “distressed sellers, not necessarily distressed properties, but distressed sellers,” president and chief executive officer David Brain said during the call. Sphere: Related Content

Sunday, November 08, 2009

MTD Capital Agrees to $52 Million Sale Leaseback of Two Office Towers in Malaysia

Business Times - November 6, 2009

MTD Capital Bhd said it will sell both its MTD Building and Bangunan Shell Malaysia to its major shareholder for RM175 million to fund its highway project in Phillipines.

MTD’s wholly owned unit, MTD Properties Sdn Bhd, has agreed to sell MTD Building, a 14-storey office tower for RM70 million to Haluan Gigih Sdn Bhd (HSGB), a unit of Alloy Consolidated Sdn Bhd, which in turn is MTD’s major shareholder.

It will also sell the 12 storey Bangunan Shell to HGSB for RM105 million.

MTD Properties will lease back the MTD Building as it is the group’s headquarters. Sphere: Related Content

Downer EDI Works Seeks Sale Leaseback of 22 Sites in New Zealand

NZ Herald News - November 6, 2009

Downer EDI Works, the listed national infrastructure business, is advertising 22 properties in a big sale-and-leaseback deal. Cos Bruyn, Manukau-based chief executive, said Downer wanted to free up capital and get out of real estate so it could expand the business into new areas.

The diversified engineering and services group is offering to lease back its big works depots and provincial bases for 10 to 20 years, paying new owners so it can continue to operate from the same sites. Downer will pay an annual rent on each property of from $12,000 to $1.17 million. It operates here as a subsidiary of the Australian business but is listed on NZX.

Six large regional depots are being advertised for sale by private treaty closing on November 26, to be leased for 20 years. The other 16 properties will be leased on decade-long terms with four rights of renewal for five years. Those will be offered at two auctions.

Charles Cooper, Colliers International's Queen St-based national industrial director, said the agency had been involved in sale-and-leaseback deals this year for NZ Post, Fisher & Paykel Appliances and Farmlands. Sphere: Related Content

Saturday, November 07, 2009

Banesto Seeking EUR 100 Million Sale Leaseback of 24 Bank Branches Across Spain

Reuters (as translated by Google)- November 3, 2009

Banesto (BTO.MC) has 24 sales offices in operation 'sale & leaseback' with which they hoped to raise 150 million euros, a source said Tuesday the operation concedora .

A spokesman for Banesto confirmed that the agency had given a mandate to Aguirre Newman sales, but declined comment on the amount of the transaction.

A spokesman for Aguirre Newman also commented on the transaction. "Banesto has put up for sale 'sale & leaseback' office a package of 150 million euros," the source said.

The financial institution follows in the footsteps of its parent Santander (SAN.MC) two years ago sold for subsequent lease its headquarters in Boadilla del Monte and several bundles of branches. Sphere: Related Content

Friday, November 06, 2009

EnergyAustralia Seeking $100 Million Sale Leaseback of Downtown Sydney HQ

The Sydney Morning Herald - November 3, 2009

The EnergyAustralia headquarters at George Street, opposite Sydney’s Town Hall, where a $100 million sale and leaseback is planned, is on the market as the NSW Government prepares to sell the electricity retailer. Sphere: Related Content

Thursday, November 05, 2009

Collapse of Bond Insurers Slams Municipal Transit Agencies

The New York Times - November 1, 2009

(Note: While these transit authority deals did not involve real estate, they clearly demonstrate that fact that credit risk can never be completely eliminated. And transit authorities are not alone in their misery.)

Like a tsunami that follows an undersea earthquake, collateral damage from the collapse of credit markets is about to strike the millions of daily transit riders in America’s biggest cities. Public transit agencies in cities including New York, Atlanta, San Francisco and Washington are under pressure to surrender $2 billion from their budgets because financial institutions have spotted a chance to gain a windfall from complicated tax-shelter deals known as “leasebacks.”

In the heady 1990s, the federal government encouraged these leaseback deals as a quick fix for budget problems. Transit agencies like New York’s Metropolitan Transportation Authority would sell their railcars and other equipment to banks, which would then lease them back to the agencies.

Leasebacks appeared to promise that everyone would emerge a winner. Banks — including many that later took federal bailout money like Bank of America and Wells Fargo — were able to cash in on substantial tax deductions through the transactions. The transit companies, which were paid with a portion of those tax savings, could use the cash to modernize their systems and make safety improvements.

Alas, as with any quick fix, the deals have set off a cascade of problems.

First, while the Internal Revenue Service declared the deals illegal in 2004, it allowed previously completed deals to remain on the books. And the situation exploded last fall when financial markets crashed and the third-party insurers chosen by the transit agencies as guarantors of the transactions lost their triple-A credit ratings (in many cases, the insurer was A.I.G.). This placed the transit agencies in “technical default” on the leases, even though they hadn’t missed any payments.

In turn, many of the banks have decided to take advantage of these “technical defaults” to reap a windfall in early-termination payments. By rights, they can immediately demand from transit authorities an amount equal to all their anticipated tax savings. These can run to hundreds of millions of dollars — New Jersey Transit alone is on the hook for $150 million.

Virtually all major city and state public transit systems in the country have at least one of these deals still on the books. If they have to make these payments, commuters will bear the brunt, in terms of higher fares and deferred maintenance.

A solution exists, however. Senator Robert Menendez, a Democrat from New Jersey, and Representative John Lewis, a Georgia Democrat, have proposed a bill that would levy a 100 percent excise tax on any lump-sum payments demanded by the banks. This would effectively force the financial industry to stop demanding default penalties and go back to the old lease payment schedule — at no cost to taxpayers.

As the nation climbs out of one of its toughest economic crises ever, we cannot be lulled into thinking the problems caused by imprudent financing techniques have vanished. Yes, the transit groups were unwise to get involved in the leasebacks, but that’s no reason to let banks continue to exploit loopholes in them at the expense of transit riders. Congress must act to protect commuters and taxpayers from this insidious legacy of a careless period in American finance. Sphere: Related Content

Aurora Health Care Completes $169 Million Sale Leaseback of 10 Medical Buildings in Wisconsin

JSOnline - October 2, 2009

Aurora Health Care Inc. has sold 10 eastern Wisconsin buildings to a Massachusetts-based real estate investment trust for $169 million, a company spokesman said Friday.

Aurora sold the medical office buildings and outpatient surgery centers to SNH Medical Office Properties Trust Inc., a real estate investment trust based in the Boston area, said Aurora spokesman Ron Irwin. The buildings total 640,000 square feet, according to SNH Medical.

The buildings will be leased back to Aurora, which has done other sale-leasebacks. Those transactions provide cash for Aurora to invest into its medical operations and reduce its debt.

The facilities sold are in Wauwatosa, at 3289 N. Mayfair Road; Glendale, at 3003 W. Good Hope Road, and 7000 N. Range Line Road; Pewaukee, at W231-N1440 Corporate Court; Grafton, at 215 W. Washington Ave.; Mount Pleasant, at 8348 Washington Ave. and 8400 Washington Ave., and Sheboygan, at 1221 N. 26th St., 2414 Kohler Memorial Drive, and 1222 N. 23rd St.

SNH Medical is a subsidiary of Senior Housing Properties Trust, based in Newton, Mass. Senior Housing Properties primarily owns nursing homes, assisted living centers and other residential properties, but has been diversifying by buying medical office buildings and other medical facilities, said Timothy Bonang, vice president of investor relations.

Aurora, in two separate sales earlier this year, sold six medical office buildings to Santa Ana, Calif.-based Grubb & Ellis Healthcare REIT Inc. for around $75 million.

(NOTE: A quarterly earnings release from the buyer indicates that the transaction was a 15 year sale leaseback at an initial rent of approximately $15 million annually - an initial yield of approximately 8.9%.) Sphere: Related Content

Wednesday, October 28, 2009

Solyndra Signs Largest Bay Area Industrial Lease in 20 Years

Reuters - October 28, 2009

Overton Moore Properties (OMP), announced today that it has signed the largest warehouse/manufacturing lease that has been executed over the past 20 years in the San Francisco Bay Area with Solyndra, Inc. Headquartered in Fremont, CA, Solyndra designs and manufactures photovoltaic systems, comprised of panels and mounting hardware, for the commercial rooftop market and has a contractual backlog of over $ 2 billion. OMP and Solyndra signed a 12 year lease for the 506,490 square foot Page Technology Park, in Fremont, CA. “This is a great way to finish up 2009 with the leasing of Page Technology Park. This is terrific news for the market and we successfully executed our business plan for this asset,” noted Timur Tecimer, President & COO of Overton Moore Properties.

Although the specific terms of the lease were not disclosed, it is reported that the total value of the lease is in excess of 45 million dollars. Solyndra also has an option to acquire the property during part of the lease term. “OMP believed, as did we, that the heavy infrastructure and clear height along with the building’s size were very desirable attributes for the emerging cleantech segment of the market. Solyndra was always on the radar given their pipeline of business, but we had very detailed discussions with a number of other larger tenants as well. We still see opportunity in this sector,” notes Rob Shannon, CBRE.

Page Technology Park will be a back-end facility for Solyndra that will support the recently announced construction of its second solar panel manufacturing plant. Solyndra is the first company to receive a loan guaranteed by the U.S. Department of Energy under Title XVII of the Energy Policy Act of 2005.

OMP recently acquired the property in December 2008 from Hewlett- Packard (HP). The property was acquired when the capital markets were in a tailspin and when the commercial real state market had stalled. OMP was one of the few buyers in the marketplace that could actually close deals during the fourth quarter of 2008. OMP acquired the property in an all cash transaction with a six month lease back from HP. “We were very conservative in our underwriting and had a margin of safety with our downtime, free rent and rental rates,” noted Tecimer. OMP acquired the asset due to the acquisition price, unique features of the building infrastructure, lack of direct competition, freeway access and submarket location.

The property, built in 1982, consists of manufacturing, warehouse, labs, and office/work area representing 506,490 square feet on nearly 30 acres. OMP strongly believes in acquiring assets below replacement in exceptional infill locations. The property has substantial infrastructure in place including 21 kVA utility service, 100% air-conditioned facilities, epoxy-coated ESD concrete slab floors, overhead power distribution bars in the manufacturing area, emergency power, 25-28’ clear heights, fully calculated and ESFR sprinkler systems.

The acquisition by OMP in December 2008 was their first industrial acquisition in Northern California. OMP will continue to strategically acquire assets in Northern California as well as in other markets in Southern California, Arizona and Nevada. Assets that will be targeted include: vacant buildings, buildings with roll-over risk within the first two years, asset repositioning and re-development. OMP through its investment fund OMP Industrial III acquires industrial assets on an all cash basis.

OMP was represented by Rob Shannon, Joe Kelley and Ben Knight of CBRE and Greig Lagomarsino of Colliers International and Solyndra was represented by John Olenchalk of GVA Kidder Mathews. Sphere: Related Content

Tuesday, October 20, 2009

Arizona Planning $735 Milion Sale Leaseback of State Buildings

New York Times - October 20, 2009

A tentative plan to implement a budget-balancing maneuver by raising $735 million from investors calls for allowing individuals and institutions to buy securities that would be backed by collateral consisting of a bulk package of prisons and other state buildings, officials said Monday.

The Department of Administration said it intends to implement the sale-leaseback strategy by assembling all the properties in a package that would be "nominally sold" to investors as part of securities sales in January.

The securities -- certificates of participation -- would entitle investors to proportional shares of annual lease payments by the state for up to 20 years.

Under the budget legislation signed into law by Gov. Brewer on Sept. 4, ownership of the properties would revert to the state at the end of the lease.

The financing arrangement is a key element of a range of strategies which Brewer and legislators used to close a projected $3 billion shortfall. However, the state still faces a projected $1.5 billion midyear gap because Brewer vetoed part of the budget and because of still-slumping revenue and a deficit carried forward from the last fiscal year.

Though state officials have tentatively settled on an approach to use to implement the budget strategy through the sale of certificates of participation, they also are open to any suggested alternatives, said department Comptroller Clark Partridge said. "We're looking for the best deal for Arizona."

The properties included on a tentative list for use in the budget plan range from a park visitor center to the House and Senate buildings and various prisons.

The nature of the assets -- they generally are properties the state could not or would not give up -- would provide some peace of mind to investors that the state intends to stick with the deal, department spokesman Alan Ecker.

Ecker said the state has received "hundreds of phone calls" from real estate brokers and others concerning the investment opportunity.

He declined to release a list of the callers, saying it was being treated as a confidential procurement matter. Sphere: Related Content

Monday, October 19, 2009

Eurohold Completes EUR 27 Million Sale Leaseback of HQ in Sofia

PropertyEU - October 16, 2009

Bulgarian industrial and financial group Eurohold has sold the Avto Union Centre office building in Sofia in a sale-and-leaseback transaction to private equity firm Bluehouse Capital Partners. The transaction price amounts to some EUR 27 mln.

Located on Christopher Columbus Boulevard, the scheme is currently 95%-let to Eurohold which will continue to use the property as its main headquarters. The scheme also houses the first car mall in Bulgaria with nine car brands and 47 different car models on display.

Eurohold said that it will use EUR 16.8 mln of proceeds from the sale to repay a construction loan to Piraeus Bank Bulgaria, while the remaining EUR 10.5 mln will be invested in its core business.

'The deal is part of the continuing efforts of Eurohold to divest non-core assets,' the company said. The accounting gain from the sale is EUR 7 mln, it added.

Focused on the South Eastern European markets, Bluehouse manages around EUR 320 mln of assets through three opportunity funds. Sphere: Related Content

Sunday, October 18, 2009

Virgin Blue Seeks Sale Leaseback of Brisbane HQ

Jones Lang LaSalle Web Site - October 16, 2009

Jones Lang LaSalle has been appointed to provide tenant representation and transaction management services for the Virgin Blue property portfolio in Australia, New Zealand and the South Pacific Islands.

The three-year contract appoints Jones Lang LaSalle, Corporate Solutions, to handle all real estate transactions for the entire Virgin Blue property portfolio in the Asia Pacific region, which is made up of 144 individual leases, licences and owned assets.

This includes 131 in Australia, eight in New Zealand, and one each in Fiji, Vanuatu, Solomon Islands, Rarotonga and Papua New Guinea.

The first project for Jones Lang LaSalle will be to manage the sale of ‘Virgin Village’, Virgin Blue’s Brisbane Headquarters located at 56 Edmonstone Road, on a sale and leaseback arrangement.

The one-year-old campus style headquarters is made up of three buildings totalling 13,220 sqm net lettable area. ‘Virgin Village’ currently houses approximately 1,000 Virgin Blue employees. Virgin Blue will continue to occupy the entire campus.

Tony Wyllie, National Head, Corporate Solutions for Jones Lang LaSalle, said, “This important contract further strengthens Jones Lang LaSalle’s position in the Asia Pacific market as the only service provider that combines transactional expertise, facilities management with national, regional and global capabilities for clients.

“As part of a tailored corporate real estate solution for Virgin Blue, our specialist property services will support Virgin Blue’s core business and allow them to continue to focus on what they do best for their customers, as we use our expertise to make maximum use of their property portfolio,” he said. Sphere: Related Content

Monday, October 12, 2009

B&Q Agrees to "Blend and Extend" Deal on UK Store Portfolio to Reduce Costs

Property Week - October 9, 2009

B&Q and British Land have agreed a landmark lease transaction that will enable the retailer to reduce its costs and the landlord to improve property values. B&Q has reduced its rent by 10% at seven of its warehouse-format stores, in return for extending the lease length. The new arrangement allows B&Q to reduce its rent by 10% in exchange for taking on new 20-year leases with no breaks and rents linked to the Retail Prices Index (RPI).

After the 10% reduction the average rent is £14.85/sq ft. The transaction also includes a new lease at a mini-warehouse at Cwmbran in Wales. British Land bought the seven B&Q stores in a £198m purchase and leaseback in 2005. The seven stores total around 700,000 sq ft. B&Q has 330 stores in the UK and Ireland.

Iain Small, B&Q’s director of property acquisition and management, said: “This regear is in line with our company-wide policy to reduce costs across the business. We have achieved an immediate 10% rent reduction across seven key trading stores.” John Madison, director at British Land, said: “This meets our strategy to drive values and shape the portfolio into well-let, long-term investments.”

Martin Supple, joint head of out-of-town retail at Cushman & Wakefield, said: “This regear is a win-win solution for both parties. It shows opportunities exist in the current market for landlords to sit down with key tenants and find ways to help them reduce costs, while still enhancing their own capital asset value.”

B&Q hopes to enter into similar arrangements with other landlords. It believes that, by offering something in return, landlords will agree to a rent reduction. Parent company Kingfisher last month reported that B&Q’s UK and Ireland sales were up 1.2% and profit was up 66% for the 26-week period to 1 August, compared with the previous year.

David Childs, director of B&Q Properties, is to leave the business after 17 years. His responsibilities will be divided among the existing team. Sphere: Related Content

Wednesday, October 07, 2009

Unicredit Completes EUR 1.1 Billion Sale Leaseback of Banking Properties in Italy

PropertyEU - October 5, 2009

Italian bank Unicredit has sold EUR 1.1 bn of property assets in two separate transactions in a bid to boost liquidity. The Milan-based lender is 'looking to reduce its property holdings from EUR 8.8 bn at present to around EUR 6 bn in the next two to three years,' Unicredit's Deputy CEO Paolo Fiorentino told Italian media during a press conference held to present the operation.

Unicredit has disposed of 13 properties for a total of EUR 574 mln, consisting of EUR 230 mln of equity and EUR 344 mln of bank financing. The assets, which have been sold to an investment vehicle managed by Italian fund manager Ream SGR, include trophy buildings such as the Milan headquarter of Banca di Roma in Piazza Edison and the head office of the former Credito Italiano in Genoa's Via Dante. The majority of the buildings will be leased back to Unicredit with rental contracts of six and 18 years. The bank realises a capital gain of EUR 110 mln through the transaction, it said.

The fund, with a life of 15 years, is targeting annual returns of 11%. It is 35%-controlled by several institutional investors including Fondazione Crt while Unicredit holds a further 35%, which it committed to sell by the first half of 2010.

The Milan-base lender is selling a further 179 properties in a EUR 530 mln sale and leaseback with fund manager Fimit. The properties will be transferred to Fimit's Omicron Plus fund, which was launched at the end of 2008 in tandem with the purchase of a first tranche of Unicredit properties for EUR 800 mln. The properties are fully let to the Italian bank with rental contracts of 18 years, with an option for a further six years. The operation results in capital gains of EUR 163 mln for Unicredit.

Finally, Unicredit has announced the sale of 3,200 units in the Omicron fund to Singapore's sovereign wealth fund GIC Real Estate for a total of EUR 78 mln. After the disposal, the Italian bank will have completed the sale of all its units in Omicron Plus. Sphere: Related Content

Acciona Seeking EUR 60 Million Sale Leaseback of Two Buildings in Madrid

PropertyEU - October 5, 2009

Spanish construction group Ferrovial has received a number of bids for its Madrid headquarters which would see the building taken over under a sale-and-leaseback structure. The firm is now considering the offers for the headquarters located at Principe de Vergara in the Spanish capital, a spokesperson for the company told news agency Reuters. Ferrovial is said to be targeting a price of EUR 43 mln for the building.

Separately, Spanish infrastructure and renewable energy company Acciona is said to have put on the market two of its buldings in the La Moraleja de Alcobendas business park in Madrid. According to an article in Spanish newspaper Cinco Dias, the building could fetch up to EUR 60 mln. The operation, which is being managed by CBRE, is planned as a sale-and-leaseback deal.

A number of Spanish companies have been trying to sell their properties over the past months in an effort to generate cash. Last week, Spain's second-largest bank BBVA unveiled the EUR 1.1 bn sale of its bank branch portfolio consisting of 948 assets. Spanish manufacturer Gallina Blanca Star also sold its head office in Barcelona this week to real estate firm Iberfindim, owned by the Fossati family, for around EUR 15 mln. Aguirre Newman advised the company in the sale process. Sphere: Related Content

Wednesday, September 30, 2009

UK Ministry of Defense Planning £50 Million Sale Leaseback of Offices in Glasgow

Herald Scotland - September 27, 2009

The Ministry of Defence is planning a major UK-wide property disposal programme as part of efforts to shore up its embattled budget, according to trade union sources.

Following last week’s report that the MoD plans a £50 million sale and leaseback of Kentigern House, the 1700-strong personnel office in the Broomielaw area of Glasgow, the move is said to be an early salvo in a much bigger programme that could involve selling-off everything from army careers offices to fuel depots to barracks and bases.

Ian Fraser, West of Scotland branch secretary for the Public and Commercial Services Union, said that a team had been assembled at the Defence Estates offices in Rosyth to co-ordinate so-called “Project Sale”, which will see many more properties sold and then leased back by their new owners to the MoD where appropriate.

The former top secret RAF airbase at Machrihanish on the Kintyre peninsula was sold earlier this year, while union bosses have been told that the Navy Buildings at Greenock, which houses marines, amphibious police and coastguards, will close in March 2011 and also be sold. There had also been plans to close a missile testing range spread across the Uists, but they were recently abandoned in the face of local protests, saving 125 jobs.

Fraser said: “We have been told by management that Kentigern is just the first. The MoD is one of the biggest landowners in Europe – they are waiting to see how it goes and will then start going for other sites. “They will sell anything they can sell.” Such a project would certainly make sense given the MoD budget is already thought to be running at a £1.5 billion deficit and is widely tipped to bear the brunt of public spending cuts regardless of which party wins the next general election.

Fraser said that the unions were opposed to both the Kentigern House sale and any further sale and leaseback deals on the grounds that they will squeeze MoD budgets in the long-run. With Kentigern House, for instance, the cost to the ministry over the first 20 years of any deal is set to be at least £70m.

He said there were also concerns that the move would be the start of the MoD withdrawing from Kentigern, amid union consultations with management about several small departments moving to England, but other sources countered that a 20-year lease was a strong sign of its commitment to the site.

Fraser said: “If this is such good value for the public purse, why has it taken 28 years [since the Glasgow offices were completed] to think of it?

“We think that the best security for Kentigern House is to keep it in the MoD and continue to own the building.”

A spokeswoman for the MoD denied that there was a fully-developed project to sell swathes of the estate, but said: “We regularly look at some of our sites for sale and leaseback opportunities. At present we are only considering this for Kentigern House and Abbey Wood in Bristol [the ministry’s procurement headquarters].

“Any other similar moves will depend on whether they are commercially viable. I can’t give a percentage of the proportion of the estate that we want to sell because it doesn’t exist.”

She added: “The proposed sale and leaseback at Kentigern House is a normal commercial arrangement to realise capital from the estate. It’s an attractive investment opportunity, given the MoD’s covenant as a long-term tenant, and has generated significant interest from financial institutions.” Sphere: Related Content

Caja Madrid Seeking EUR 70 Million Sale Leaseback of 58 Bank Branches in Spain

Expansión (as translated via Google) - September 29, 2009

Caja Madrid has released 58 branches to its network, an operation that provided input at least 70 million euros ($102.4 million) according to BusinessWeek reported yesterday. The Executive Committee of the box was informed of the operation in its meeting yesterday.

In line with what we already have other banks and savings banks Caja Madrid wants to perform, through its private bank Altae a sale & leaseback transaction, ie sale and subsequent lease of the properties. It will target a gain of 40 million.

The lease is for 25 years plus four renewals of five years, after which the lender has an option to repurchase. It also has a preferential option if the tenant wishes to dispose of the investment.

The investor will receive an annual return of 6% plus CPI. The offices up for sale are distributed throughout the national territory and 70% of them are located in provincial capitals.

With this operation, the second box Spanish intends to strengthen its capital and improve its balance sheet, as they have done entities such as Santander, BBVA, Caixa Galicia and Banco Pastor. The sale of the property resulting from their low balance, which reversed a decline in risk-weighted assets, or, put another way, less need for capital.

Many of the Spanish financial institutions have already made, or are considering such operations. BBVA has just closed his for 1.154 million last week.

Others like Sabadell, which also will eventually be raised to sell their entire branch network, given the situation in the housing market have opted to sell in small lots, they're putting mainly private banking clients. In fact, the very Caja Madrid will assess the market response to its offer to decide whether to sell more offices. Its branch network with 2183 totals as of June, of which about half is in Madrid.

Fight with the Electoral Commission
Aguirre and Gallardon returned yesterday to fight in the Electoral Commission when the first box, backed by a large majority, demanded that the president of this body, Fernando Serrano-del Ayuntamiento-is inhibited in the court case initiated by the consistory against implementation of the new law on regional boxes to the electoral process of the entity.

Most claim that Serrano may not represent the Commission, whichever is called to testify at trial. Serrano declined to vote on the issue, not being included in the agenda. The Aguirre had asked to convene another meeting tomorrow. In addition, Esperanza Aguirre, said yesterday that Rodrigo Rato TVE and Ignacio Gonzalez could preside Caja Madrid.

Sell and rent
1. Runs the operation through its private bank and hopes to join Altae 70 million, with gains of 40 million.

2. It stays as a tenant for 25 years renewable for another 20 and secured an option to buy.

3. Many Spanish banks and savings banks have launched similar operations to improve its balance sheet. Sphere: Related Content

Tesco Ponders Another £400 Million Sale Leaseback of UK Property Portfolio

Estates Gazette Blog - September 28, 2009

The FT fails to mention this morning that former City golden girl Robin Saunders is involved in a deal that will see Tesco insert £400m of its stores into a new fund called Index Linked Properties. Even so, the principle (as well as the principal) behind the fund sounds interesting.

Saunders is the photogenic American who used to make the headlines at WestLB bank before leaving after a tiff in 2003. In 2005 she set up a £1b property fund with dealmaker Paul Bloomfield. Not sure what happened to that. But Saunders runs Clearbrook Capital out of 25, Grosvenor Street. Last summer she announced the firm had a £1b to spend.

The FT says Clearbrook and DTZ are to manage Index Linked Properties: a name which betrays the cautious thinking behind the fund. It will be a closed-end Jersey investment company which will only add properties with index-linked leases to the £400m of stock that Tesco are contributing by way of sale and leaseback.

What can go wrong? Finding more of the same stock perhaps? There are now dozens of nascent property funds, many given to empty boasting of having £1b of "firepower". But here we have a fund that appears to have bagged £400m of safe and solid stock and only wants more of the same. Sounds like a buy. Sphere: Related Content

Getty Realty Completes $49 Million Sale Leaseback of 36 Exxon Gas Stations in Washington DC Metro Area

Getty Realty Web Site - September 28, 2009

Getty Realty Corp. (NYSE: GTY) announced today that on Friday September 25, 2009 it acquired 36 Exxon branded gasoline station and convenience store properties located primarily in Prince George’s County, Maryland, for $49.0 million in a sale/leaseback transaction with White Oak Petroleum LLC.

The 36 properties were acquired in a simultaneous transaction among ExxonMobil, White Oak Petroleum and Getty Realty Corp., whereby White Oak Petroleum acquired the properties from ExxonMobil and simultaneously completed a sale/leaseback of all 36 properties with Getty Realty Corp. The unitary triple net lease for the properties between White Oak Petroleum and Getty Realty Corp. has an initial term of 20 years plus renewal options. The properties will continue to be operated under the Exxon brand by the existing independent dealers. White Oak Petroleum is an affiliate of DAG Enterprises, Inc., led by Joe Mamo, one of the largest motor fuel distributors in the DC, Virginia and suburban Maryland area.

Getty Realty Corp. is the largest publicly-traded real estate investment trust in the United States specializing in ownership and leasing of convenience store/gas station properties and petroleum distribution terminals. The Company owns and leases approximately 1,100 properties nationwide. Sphere: Related Content

Tuesday, September 29, 2009

Ferrovial Nearing EUR 43 Million Sale Leaseback of Madrid HQ

Reuters - September 29, 2009

Spanish construction-to-services group Ferrovial (FER.MC) said on Tuesday it had received various offers for its Madrid headquarters on a sale and leaseback arrangement.

The firm was considering the offers for the headquarters in Principe de Vergara, said a spokesman.

"Our core business is not property," he said. Ferrovial is an infrastructure company with operations in 48 countries in a range of sectors including construction, airport, toll road, and car park management and maintenance, and municipal services.

A source close to the deal said Ferrovial wanted about 43 million euros (USD 62.6m) for the building.

A number of Spanish companies, including banks Santander (SAN.MC), BBVA (BBVA.MC) and Pastor (PAS.MC), have sold buildings to raise liquidity, leasing them from the buyer. Sphere: Related Content

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