Thursday, July 30, 2009

State of Arizona May Pursue Property Sale Leaseback in Bid to Raise up to $1 Billion

Arizona Republic - July 29, 2009

Call it a sign of desperate times: Legislators are considering selling the House and Senate buildings where they've conducted state business for more than 50 years.

Dozens of other state properties also may be sold as the state government faces its worst financial crisis in a generation, if not ever. The plan isn't to liquidate state assets, though.

Instead, officials hope to sell the properties and then lease them back over several years before assuming ownership again. The complex financial transaction would allow government services to continue without interruption while giving the state a fast infusion of as much as $735 million, according to Capitol projections.

For investors, the arrangement means long-term lease payments from a stable source.

Earlier this month, Republican Gov. Jan Brewer vetoed such sale/leaseback provisions along with most of the rest of a fiscal 2010 state budget plan sent to her by the Legislature.

But the provisions are expected to return as part of a GOP-led legislative budget proposal surfacing this week. Although Brewer spokesman Paul Senseman called sale/leaseback deals "one of the governor's least favorite options," he conceded the likelihood that they'll play a key role in any plan to close a state shortfall estimated at $3.4 billion.

State properties now being considered for sale and leaseback include the House and Senate buildings, the Phoenix and Tucson headquarters of the Arizona Department of Public Safety, the State Hospital and the state fairgrounds, according to a document obtained by The Arizona Republic. Some prison facilities also are under consideration.

In total, the list comprises 32 properties that, if built from the ground up, come with a combined replacement value in excess of $1 billion.

The properties were chosen based on attractiveness to investors, buildings the state would be unlikely to walk away from, such as prisons or other facilities that provide essential government services.

Only one state property thus far is targeted for outright sale: the state Agricultural Laboratory in Phoenix.

The state has conducted sale/leaseback deals in the past, though rarely.

This is different. Manos believes it would be the first time the state has sold and leased back state buildings with the intent of using the revenue to fund general operations rather than particular projects.

Under the most recent legislative proposal, the state would seek a series of lease arrangements spanning as much as 20 years. Deals that would generate the targeted $735 million in revenue would mean state lease payments totaling $60 million to $70 million a year, according to budget analysts. Sphere: Related Content

Wednesday, July 29, 2009

Tesco Completes EUR 63 Million Sale Leaseback of Logistics Portfolio in Hungary

Property Week - July 28, 2009

Investment firm WP Carey has provided €63m ($90m) in alternative long-term finance through the sale and leaseback of Tesco’s logistics portfolio in Hungary. The finance was provided by two publicly held non-traded REITs, CPA:16-Global and CPA:17-Global, owned by WP Carey. The transaction is a part of the supermarket chains' ongoing program to release value from its property portfolio. It is WP Carey’s first investment deal in Hungary. Tesco was represented by Cushman & Wakefield. WP Carey was advised by King Sturge. Sphere: Related Content

Sunday, July 19, 2009

J.P. Morgan Seeking Sale Leaseback of 23 Building Portfolio in U.S.

Real Estate Finance & Investment - July 17, 2009

Houlihan Lokey has launched the sale of a 23 office buildings totaling 7.1 million square feet on behalf of J.P. Morgan. The portfolio, the largest single offering of office buildings so far this year, includes the 2.2 million-square-foot One Chase Manhattan Plaza and the 1.1 million-square-foot 4 New York Plaza in Manhattan. Also offered is a 865,000-square-foot condominium interest in 45-story Chase Center Seattle and 712 Main St., a 35-story 794,000-square-foot art deco tower in Houston. The bank will consider offers for the whole portfolio, regional pools or single assets.

J.P. Morgan plans to lease back about 60% of the space, including seven buildings that are fully leased to the bank. An investor familiar with the offering speculated the sale may be a move to reorganize the bank's investments following its acquisitions of Bear Stearns and Washington Mutual.

Market players said it would be difficult to assess the portfolio's value ­ like 'throwing darts,' as one put it ­ given uncertainty about the rent rolls, the seller's motivation, whether J.P. Morgan will offer seller financing and a lack of recent comparable sales. Sphere: Related Content

RaceTrac Seeking Sale Leaseback of 16 Gas & Convenience Stores in Six States

CSP Daily News - July 17, 2009

RaceTrac Petroleum Inc. said it is continuing "aggressive" growth plans by launching a sale-leaseback program on a select portion of its retail fueling station/convenience store portfolio. RaceTrac has engaged CB Richard Ellis Group Inc. (CBRE) as its exclusive capital markets advisor for this initiative. As reported in a CSP Daily News Flash, the initial offering of 16 gas station/convenience stores in Arkansas, Florida, Georgia, Mississippi, Tennessee and Texas is expected to generate in excess of $42 million.

In 2008, RaceTrac generated in excess of $7.5 billion in annual revenues through the operation of more than 530 retail gas/c-stores in 12 southeastern states. RaceTrac has been steadily growing since its inception 75 years ago and is currently ranked as the 56th largest privately held U.S. company by Forbes based on annual revenues

Atlanta-based RaceTrac said that it intends to reinvest the sale-leaseback proceeds in its retail development pipeline and to take advantage of current buying opportunities. Ownership of a RaceTrac store is an opportunity that has never been made available to the public in the company's operating history, it said.

James Mitchell and Sean McConnell of CBRE's Global Corporate Services unit will be lead points of contact for the portfolio offering. Commenting on the new relationship, Mitchell said, "CBRE's national platform matched well with RaceTrac's desire for global reach and strong capital market relationships; we are excited to be taking a package of such well-located assets to market."

McConnell added, "The RaceTrac sale-leaseback investment couples newly constructed retail product and single tenant net leases secured by a high credit regional fuel marketing brand. Given the current turbulent climate, we are very bullish on the opportunity to steward such a stable retail investment opportunity to market."

The assets will be available in bulk or on an individual basis.

Prospective investors are invited to contact CBRE at 407-404-5000 or http:/ Sphere: Related Content

First Hotels Completes EUR 41 Million Sale Leaseback of Hotel in Gothenburg

PropertyEU - July 17, 2009

German open-ended fund manager Deka Immobilien has bought a hotel in the Swedish city of Gothenburg for the equivalent of around EUR 41 mln. Located above Gothenburg's central station, one of the main railway junctions in Scandinavia, First Hotel G was acquired for Deka's WestInvest ImmoValue open-ended mutual property fund for institutional investors.

The property comprises total lettable space of around 13,600 m2 and is fully let to First Hotels for a term of 25 years. The 300-room First Hotel G is among the largest and most modern hotels in Gothenburg.

The purchase was implemented as part of a sale-and-lease-back agreement. The vendor was the Norwegian company Host Hoteleiendom, which owns 21 other hotel properties in Scandinavia all let to First Hotels. Sphere: Related Content

Credit Suisse Nearing £147 Million Sale Leaseback of Canary Wharf HQ

Property Week - July 17, 2009

More than 15 bidders are vying to carry out a purchase and leaseback of Credit Suisse Bank’s 20 Columbus Courtyard in London’s Canary Wharf.

CB Richard Ellis is marketing the 258,314 sq ft property for around £147m at an initial yield of 6.25%, on a freehold or long-leasehold basis with a guaranteed 25-year lease to Credit Suisse Securities. There is a ‘cap and collar’ maximum and minimum rental increase of 4% and 1.5%. A shortlist of around five bidders will be drawn up this week. Sphere: Related Content

Co-operative Group Nears £40 Million Sale Leaseback of 20 UK Grocery Stores

Property Week - July 17, 2009

Threadneedle and LaSalle Investment Management are the final two bidders for a purchase and leaseback of 20 Co-operative Group stores. The pair are awaiting a decision that was expected at the end of this week. The transaction would comprise the sale of 20 Somerfield and Co-Op branded stores for £35m-£40m.

The Co-op would lease the stores back for 25 years on inflation-linked rents.

Threadneedle and LaSalle are thought to have made the final shortlist from the eight initial bids. The sale follows the Co-op’s £1.6bn acquisition of the Somerfield supermarket chain in March this year.

Jones Lang Lasalle advises Co-operative. All parties declined to comment. Sphere: Related Content

Friday, July 17, 2009

Sale-Leaseback Sticker Shock

Wall Street Journal - July 15, 2009

Demand for corporate sale-leaseback real-estate transactions is picking up across the U.S. as companies seek a fast way to raise cash to ride out the recession. But a scarcity of buyers and low bids mean fewer deals are actually getting done.

Sale-leaseback transactions -- where a company sells its office building, plant or other property and then leases it back from the new owner -- is an alternative form of financing that some companies turn to when traditional financing, such as bank loans, are harder to obtain. During the first five months of this year, the value of U.S. sale-leaseback transactions declined to $853 million, compared with nearly $3 billion in the year-earlier period, according to Real Capital Analytics, which tracks deals greater than $5 million.

Part of the drop in transaction value reflects lower real-estate values, but the biggest issue is that buyers and sellers are so far apart on price that many transactions fizzle when sellers walk away. Just 63 deals were completed between January and May, compared with 174 in the first five months of 2008, according to Real Capital Analytics. Sphere: Related Content

Thursday, July 16, 2009

PIC Seeking Sale Leaseback of Five Hypermarkets in Romania

Ziarul Financiar - July 14, 2009

Ilie Penescu, co-owner of the Pic hypermarket chain, wants to secure liquidity by selling the fixed assets of the retailer under a sell and lease back contract, which allows the company to continue its retail operations as a lessee in the current locations. 'We want to sell the assets of the Pic chain to investors and then lease them back.

We have sent letters of intent to investment funds, banks and real estate developers,' said Ilie Penescu. He resorted to financial consultants from the BCR and from investment bank BAC Investment for this project. The chain has five hypermarkets which last year posted 100-120 million euros in sales. In 2007, the Pic stores in Craiova and Braila were appraised at 140 million RON (42 million euros) when they were brought as a contribution to the share capital of the group controlled by the Penescu brothers. Sphere: Related Content

Novant Health Completes Sale Leaseback of 12 North Carolina Health Care Facilities

Winston Salem Journal - July 14, 2009

Novant Health said yesterday that it has sold 12 office buildings in Forsyth County, which it will lease back from the new owners.

CGRE Holdings, a private investment group, acquired the buildings; CGRE and Novant agreed not to disclose the purchase price.

'The transition will be seamless and the people who work or visit these locations will not notice any changes,' said Dean Swindle, the chief financial officer and president of ambulatory services with Novant.

'The proceeds from the sale will be used to help finance capital projects important to our communities such as the construction of community hospitals already under way, renovations, new outpatient facilities, medical technology and equipment.'

Novant Health is a not-for-profit organization and, as a result, the sold properties or a portion of the properties had been tax-exempt.

Under new ownership, these properties will return to the property tax base, where Novant estimated they would provide about $300,000 in annual tax revenues. Sphere: Related Content

Wednesday, July 15, 2009

Wolseley Seeking £150m Sale Leaseback of Several UK Trade Centres?

Estates Gazette reports that Wolseley, the FTSE 100 building supplier, is investigating a £150m sale-and-leaseback of several of its UK trade centres. Sphere: Related Content

Saturday, July 04, 2009

Cracker Barrel Closes $58 Million Sale Leaseback of Retail Distribution Center and 14 Restaurants

Trading Markets - July 1, 2009

Cracker Barrel Old Country Store, Inc. (CBRL) announced the closing of the sale-leaseback of its retail distribution center and fourteen of its store locations, with a fifteenth expected to close on or before July 31st. The transactions are expected to produce aggregate gross proceeds of approximately $57.6 million, consisting of $12.4 million relating to the distribution center and slightly more than $3 million for each of the 15 store locations. Sphere: Related Content

Legend Healthcare Announces $55.5 Million Sale Leaseback of Four Skilled Nursing Facilities in TX

SEC Edgar Web Site - June 30,2009

National Health Investors, Inc. (NYSE:NHI) announced today a $55.5 million purchase/leaseback transaction involving four Texas skilled nursing facilities with 595 beds owned by affiliates of Legend Healthcare, LLC, a privately-owned company (“Legend”). The average age of the facilities is 5 years. Legend is currently a lease customer of NHI and specializes in the operation of transitional care and skilled nursing facilities. Three of the four facilities were purchased by NHI on June 30, 2009, for a total of $39.7 million, with the fourth facility expected to be purchased by NHI for $15.8 million no later than August 1, 2009. The purchases are funded from NHI’s accumulated cash liquidity. The four facilities are being leased to Legend over 15 years at an initial lease rate of 10% plus annual increases. Legend has the option after 7 years to purchase the facilities. Sphere: Related Content

Wikinvest Wire