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

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