Sunday, May 30, 2010

JV Proposes Tax Exempt Financing to Fund $2.2 Billion Sale Leaseback of State of CA Office Buildings - May 21, 1010

AEW Capital Management and the California Municipal Finance Authority have submitted a unique bid to acquire an 11-property portfolio of office buildings from the state of California. The partnership, which is one of seventeen potential buyers that submitted second-round bids, gave the only proposal that aims to keep the properties in the public domain. The portfolio is valued at about $2.2 billion.

In the proposal, CMFA would acquire the portfolio via tax-exempt lease revenue bonds that would pay about 5%. AEW, which would not put any capital into the transaction, would act as the asset manager while a trustee would be appointed to receive the lease payments on behalf of the bond holders. A brokerage firm would be hired to manage the properties.

This structure would allow the proceeds from any future sale to stay in the public domain. At the time of a sale, roughly 50% of proceeds would be given back to the CMFA's constituent local authorities and the rest would go to various affiliated non-profit organizations.

The rest of the offers were for more standard sale-lease backs.

Although there is a 2004 California law that prohibits state-affiliated public entities from assuming additional long-term debt, CMFA is a Joint Powers of Authority that is focused on financing economic development and charitable initiatives for local authorities and therefore is exempt from the law.

A response is expected this week, with the state selecting three to five final bidders. If AEW's proposal were selected to go forward, the individual jurisdictions where the properties are located would have to approve the transaction. Sphere: Related Content

Wednesday, May 19, 2010

Banca Monte dei Paschi di Siena Seeking EUR 1.8 Billion Sale Leaseback of Italian Property Portfolio

PropertyEU - May 19, 2010

French insurer AXA Real Estate is taking part in a consortium that is bidding for EUR 1.8 bn worth of property from Siena-based bank Banca Monte dei Paschi di Siena (MPS). Under the sale-and-leaseback plan, the Italian bank would retain a 30% stake in the portfolio with the rest split between Italian property company Sansedoni (40%), AXA Real Estate (20%) and investment bank Mediobanca (10%).

MPS expects to post a capital gain of EUR 443 mln from the sale which is aimed at boosting the bank's capital and liquidity ratios. During the presentation of the bank's first-quarter results, Chief Executive Alberto Vigni said he was 'confident' that the deal would be completed this year.

The lender is currently discussing the sale and leaseback of the property with the Bank of Italy. The operation will see MPS transfer the assets to a new company, Perimetro Gestione Proprietà Immobiliari, which will be seeking new investors in the coming months.

The sale of MPS' real estate was first announced in late 2008 but came to a halt last year due to a change in legislation introduced by the Bank of Italy.

MPS is also working on two other real estate asset disposals. In March, MPS put around 370 bank branches worth around EUR 700 mln on the market and said it was planning to sell around EUR 500 mln worth of properties consisting of 266 branches no longer strategic. Sphere: Related Content

Caja Madrid Agrees to EUR 108 Million Sale Leaseback of Office & Data Center in Madrid (as translated by Google) - May 18, 2010

Caja Madrid has reached an agreement on 'sale and leaseback' in Las Rozas (Madrid) with the German fund SEB ImmoPortfolio Target Return Fund, the manager of SEB Asset Management, by which the entity obtained a revenue of 108 million and a total capital gain of EUR 48 million, reported the state.

The commitment of the lease is 30 years. Caja Madrid use the income to strengthen its capital ratios and improve their creditworthiness, in line with the strategy followed during the first quarter of the year, which ran the sale and lease back 83 branches with total capital gains obtained from 55.2 million euros.

The transaction Caja Madrid reserve a right of first offer over the lease period and in case of transfer by the lessee.

The building, which houses the computer-based Caja Madrid, is in the Madrid suburb of Las Rozas, is National Architecture Award and has an area of 43,700 square meters with 537 parking spaces.

The property is part of a business park established in the mid-nineties with excellent access and communications in the northwest axis of the Community of Madrid. Sphere: Related Content

Marks & Spencer Enters £300 Million Sale Leaseback of UK Store Portfolio to Help Fund Pension Deficit

MSN Money UK - May 13, 2010

High street chain Marks and Spencer has agreed a pension funding package worth £800 million in a bid to close the scheme's deficit, it has been announced.

The group's defined benefit scheme, which has 123,000 members, faced a £1.3 billion shortfall when its last valuation was carried out at the end of March last year.

In order to close this, M&S has agreed to pay in an additional £376 million between now and 2018.

It will contribute £35 million a year for the next three years, rising to £60 million for the remainder of the period, on top of the regular contributions it already makes.

The fund will also benefit from a further £300 million through an additional interest in property owned by M&S.

Under the partnership, an interest in property, including stores, is transferred to the pension scheme and then leased back by M&S, providing the pension with an annual income.

The partnership is already generating around £72 million a year for the scheme until 2022, while the latest transfer will contribute a further £36 million annually for 15 years from 2017.

The group will also transfer assets worth £124 million to the pension scheme from existing US dollar hedge contracts.

The £500 million difference between the current deficit and the additional contributions M&S plans to make should be made up by investment returns on the scheme's existing assets.

M&S said the funding plan should not have a "material impact" on the group's net assets or its income statement. Sphere: Related Content

Thursday, May 13, 2010

Bellevue Office Tower Leased to Microsoft Trades for $310 Million

CoStar Group - May 12, 2010

What do you do in this market if you're raising money like crazy to invest in commercial real estate -- as much as $100 million a month? If you're Cole Credit Property Trust III Inc., a non-traded REIT in Phoenix, AZ, you spend like crazy, too.

The registered REIT sponsored by Cole Real Estate Investments is in the midst of a two-year public stock offering that has been ongoing since October 2008. As of May 1, Cole Credit III had raised $1.5 billion. So far, it has invested primarily in retail-related buildings net leased to investment-grade and other creditworthy tenants, typically necessity retailers such as drug stores, family restaurants and home improvement stores.

But now the REIT has an even bigger fish on the line. On April 30, one of its subsidiaries agreed to spend $310 million to purchase the 583,000-square-foot City Center at 555 110th St. in Bellevue, WA - a hefty $530 per square foot.

The property is 99.6% occupied, of which approximately 96.3% is subject to a net lease with Microsoft Corp. that expires in June 2024. Microsoft is currently paying an annual base rent of $18.8 million - an amount that increases annually by approximately 2.4% of the then-current annual base rent.

An affiliate of Beacon Capital in Boston, MA, currently owns the building and up until last month had reportedly been in discussions to the sell the building to a German investment fund for about $286 million.

Cole Credit III is expected to close on the deal by June 18, 2010.

This is not the typical deal for the Cole Credit III. As of May 5, it owned 205 properties in 37 states, comprising approximately 5.3 million gross rentable square feet of commercial space and approximately 6.3 million square feet of land subject to ground leases. The typical deal size has been in the $1 million to $6 million range. And that still makes up the bulk of its activity

Besides, the City Center, it is also under contract to make the following purchases this month.
LA Fitness - League City, TX, 45,000 SF, for $7,335,000.

Walgreens - Rocky Mount, NC, 14,820 SF, for $5,863,000.

O'Reilly Automotive - Central, LA, 6,800 SF, for $927,000.

Evans Exchange - Evans, GA, 194,960 SF, for $19,500,000.

Lowe's - South Lebanon, OH, ground lease, for $4,808,000.

Kohl's - South Lebanon, OH, ground lease, for $3,125,000.

White Castle - South Lebanon, OH, ground lease, for $467,000.

Northern Tool - Ocala, FL, 26,054 SF, for $3,518,000.

Walgreens - Lancaster (Palmdale), CA, 13,650 SF, for $5,537,000.

Walgreens - Beloit, WI, 14,820 SF, for $4,310,000. Sphere: Related Content

Monday, May 10, 2010

Barclays Seeking Sale Leaseback of 34 Bank Branches in Spain - May 6, 2010

Barclays have put up another Spanish commercial property investment portfolio for sale and leaseback, this time of 34 bank branches.

The bank has a network of 586 branches throughout Spain and has been selling many of these over the last few years. In 2008 it sold 24 branches to Redevco in a transaction reported at €65m. The bank also sold a unit in Paseo de Gracia, Barcelona some 12 months ago for around €20m. Colliers International acted in one of the last portfolio sale and leaeback transactions for nine Barclays bank branches around Spain towards the end of 2009.

The largest transaction recorded by for Barclays in the Spanish real estate investment market took place in 2006 for a price of around €115m. This was for the office investment building located at Calle Mateo Inurria, Madrid, Spain.

According to sources close to the transaction the current offering is the last Spanish property investment transaction which Barclays intend to undertake this year. Jones Lang LaSalle have been given the exclusive mandate. Sphere: Related Content

Saturday, May 08, 2010

Dividend Capital To Buy 33 Net Leased Properties from iStar Financial for $1.4 Billion

CoStar Group - May 5, 2010

Dividend Capital Total Realty Trust Inc. agreed to acquire a portfolio of office and industrial properties from iStar Financial Inc. for an aggregate purchase price of $1.4 billion, adjusted for closing costs and prorations of taxes, operating expenses, leasing costs and other items.

Although Dividend Capital did not identify the property assets it is acquiring, it did say that the portfolio consists of 33 office and industrial properties in 18 geographic markets within the United States aggregating approximately 11.8 million net rentable square feet. Included in this portfolio are 22 office properties in 12 markets aggregating approximately 5.1 million net rentable square feet and 11 industrial properties in 10 markets aggregating 6.7 million net rentable square feet.

The properties included in the portfolio are primarily leased to large corporate tenants subject to triple net leases.

Earlier this year, iStar Financial announced that it was pursuing a sale or other transaction involving a portfolio of corporate tenant lease assets representing an aggregate $1.1 billion of book value. The portfolio is encumbered by secured, non-recourse term debt with an aggregate principal balance of $947.9 million that matures in April 2011.

The transactions are expected to close in the second quarter of 2010 subject to finalization of due diligence and obtaining sufficient financing, as well as other customary closing conditions.

iStar has agreed to provide Dividend Capital with up to $125 million in mezzanine financing after the buyer has obtained a commitment for senior financing. Dividend Capital has made an initial earnest money deposit of $25 million in respect of the transactions. Sphere: Related Content

Wednesday, May 05, 2010

Agrokor Completes EUR 77 Million Sale Leaseback of Two Office & Logistic Facilities in Zagreb, Croatia

W. P. Carey Website - May 5, 2010

W. P. Carey & Co. LLC (NYSE: WPC), a global investment management company that provides long term asset-based and build to suit financing for companies, announced today that CPA®:17 – Global one of its publicly held non-traded REIT affiliates, has acquired two office and logistics facilities in Zagreb, Croatia. The transaction is W. P. Carey’s first in Croatia and is for a total consideration of €77 million ($101 million), including acquisition fees. The two properties comprise the office headquarters and national distribution center of Konzum, the largest food retailer in Croatia and a subsidiary of Agrokor.

Founded in 1976, Agrokor is the largest private company in Croatia. Agrokor is the largest company in the Adria region and one of the largest among its peers in CEE. A vertically-integrated business with nearly 40,000 employees and almost €4 billion in revenues, it is Croatia’s largest food producer, largest food processor, largest food distributor, and largest food retailer.

Jeffrey Lefleur, Executive Director of W. P. Carey, said:

“As one of the largest real estate transactions in Eastern Europe in the last three years, the acquisition is further indication of W. P. Carey’s ability to provide long term capital to companies based in capital-constrained regions on the Continent.

“Given Agrokor’s dominance of the agribusiness industry and history of successful acquisitions and growth, this was an ideal situation for us to enter the Croatian market. Having its strategically critical operating assets on a long term lease is consistent with our investment strategy.”

Ivica Todoric, Founder and President of Agrokor, said:

“This transaction with W. P. Carey allowed us to structure a deal that meets our short term commitments while supporting our longer term goals.”

King Sturge was the real estate advisor to the transaction. Sphere: Related Content

TDG Ltd Announces £22 Million Sale Leaseback of Eight Cold Storage Facilities in the UK

W. P. Carey Website - May 4, 2010

W. P. Carey & Co. LLC (NYSE: WPC), a global investment management company that provides long term sale leaseback and build to suit financing for companies, announced today that CPA®:17 – Global, one of its publicly held non-traded REIT affiliates, has purchased eight cold storage facilities from UK logistics and supply chain management company TDG Limited for a total consideration of £22 million ($34 million), including acquisition fees, in an all-equity transaction. The purchase of a ninth cold storage facility is pending subject to final approvals and is expected to close in the next few weeks. The properties are leased back to TDG on a long term basis. The nine properties, which total over 46,000 square meters (500,000 square feet) of cold storage warehousing and office space, are located across England and Wales.

TDG Ltd operates throughout Europe, including the UK, Ireland, France, Spain, Germany, the Benelux, Poland and Hungary, and is 100% owned by private equity investment firm Douglas Bay Capital PLC.

Agents on the transaction were Celtic Asset Management and GVA Grimley for TDG and Knight Frank for W. P. Carey.

Jennifer Walsh, Director of W. P. Carey, said:

“We at W. P. Carey have recognised the growth potential that TDG offers, last year producing results well ahead of its competitors. In addition, the UK public cold storage industry has proved a defensive and stable one in recent months. We believe that the acquired portfolio includes some of TDG’s most sustainable sites, offering a diversified customer base and large geographical market shares.
“This transaction further demonstrates W. P. Carey’s ability to work with private equity firms in order to develop alternative financing structures that support their broader investment strategies as well as provide capital to their portfolio companies.”

Mike Brannigan, CEO of TDG, said:

“We are pleased about this new business relationship with W. P. Carey. The transaction is another key milestone in our property and business strategy to further strengthen our balance sheet in order to reinvest and accelerate the development of TDG. Over the past year TDG has substantially changed its business profile and is now best placed to capitalise on a more benign economic environment.

“We are delighted to work with long term partners such as W. P. Carey, who understands the sector and TDG's long term objectives.” Sphere: Related Content

Tuesday, May 04, 2010

Venter Institute Completes $53 Million Sale Leaseback of Rockville R&D Campus

GenomeWeb - May 4, 2010

The J. Craig Venter Institute has sold its Rockville, Md., headquarters campus to BioMed Realty Trust for $53 million, but will continue to carry out research there under a 10-year renewable sale-leaseback agreement with the buyer, JCVI said today.

JCVI fully leases the campus, which consists of five buildings totaling 218,000 square feet, located at 9704-9714 Medical Center Drive. Some 300 scientists and support staffers are based at the campus, while another 100 scientists and support staffers are employed at JCVI's San Diego campus.

J. Craig Venter, JCVI's founder and president, said in a statement that the sale-leaseback "will enable us to remain financially sound for the foreseeable future, and ensure that we can continue our groundbreaking genomic science."

JCVI was formed in October 2006 through the merger of three affiliated organizations — the Institute for Genomic Research, the J. Craig Venter Institute, and the J. Craig Venter Science Foundation.

The deal with Venter is BioMed Realty's second acquisition of life-science property along the I-270 corridor in Maryland's Montgomery County this year. On March 1, the REIT announced it had acquired two fully-leased life science buildings totaling about 82,400 square feet in Gaithersburg, Md., for $14.4 million. The buildings are leased to MedImmune and GenVec.

The JCVI campus acquisition expands BioMed Realty's Maryland portfolio to six properties, consisting of 15 buildings and 1.4 million rentable square feet of life-science space. BioMed Realty is headquartered in San Diego. Sphere: Related Content

Saturday, May 01, 2010

CVS Portfolio Trades for $63 Million - April 29, 2010

A private investor has acquired a net lease portfolio of 20 CVS/pharmacies for $62.7 million. The seller was also a Texas-based private investor.

Encompassing more than 248,000 square feet, the retail properties are located in primary and secondary markets in Alabama, California, Connecticut, Florida, Georgia, Illinois, Massachusetts, Michigan, New Hampshire, Pennsylvania, Texas and Virginia. The properties, which average 12,400 square feet, are 100% leased to CVS/pharmacies, according to Jeff Hughes, a senior director of investment sales for Stan Johnson Co., a Tulsa, OK-based net lease brokerage firm.

Hughes represented both the buyer and the seller, along with Brandon Duff, also of Stan Johnson Co. He says the buyer was attracted to this deal because the properties were highly leveraged and well-suited to meet its unique needs for this transaction.

"These properties have long-term, bond-style leases with investment grade tenants, providing highly leveraged assumable loans in place," Hughes says. "This transaction type is perfectly suited for owners needing to replace debt from 1031 or 1033 exchanges." Sphere: Related Content

W.P. Carey Appoints H. Cabot Lodge, III President of W. P. Carey & Co. Ltd. and Head of European Investments

W. P. Carey Website - April 29, 2010

Investment firm W. P. Carey & Co. LLC (NYSE: WPC) announced today that H. Cabot Lodge, III has been appointed President of its UK subsidiary, W. P. Carey & Co. Ltd. Mr. Lodge will serve as head of European Investments and is based out of W. P. Carey’s London office.

Gordon DuGan, President and Chief Executive Officer of W. P. Carey, commented “Cabot’s appointment to head our European investment team underlines our commitment to further strengthen the firm’s international platform. Having a senior executive with Cabot’s capabilities and credentials will enhance our ability to capitalize on recent successes and pursue opportunities in the current market. Cabot has more than 25 years of deal experience, including 15 years previously with W. P. Carey, and his knowledge will be a significant asset in accelerating the development of our European franchise.” Sphere: Related Content

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