Bloomberg - April 30, 2007
The London headquarters of HSBC Holdings Plc, Europe's largest bank by market value, was bought by Spanish real estate company Metrovacesa SA for 1.09 billion pounds ($2.2 billion), a record for a U.K. building.
HSBC will remain in the 45-story tower at 8 Canada Square, in the Canary Wharf business district, according to a statement today. About 8,000 people work in the building, which was designed by Norman Foster and has 1.1 million square feet of space.
"People are prepared to pay a premium to get into the London market, even when some are calling the top of the market," said Sarah Bate, head of central London research at Knight Frank LLP.
Central London is now the world's most expensive city in which to lease an office and, according to an estimate by Bate, investors bought a record 15.3 billion pounds of properties in the area last year. A shortage of space is pushing up rents as financial-services firms hire more people.
The previous record for the acquisition of a U.K. office building was the 690 million pounds paid in 2003 by Royal Bank of Scotland Plc for Citigroup Inc.'s London headquarters. That property is on the opposite side of the same square at Canary Wharf development as the HSBC Tower.
HSBC agreed to sell and lease back the building from Madrid-based Metrovacesa for the next 20 years, paying an initial annual rent of 43.5 million pounds, or 3.99 percent of the purchase price. HSBC's long-term debt is rated Aa2 by Moody's Investors Service and AA- by Standard & Poor's.
Rents for new or freshly renovated offices in the City of London district, London's main financial services center, last year rose by more than 18 percent to 55 pounds a square foot, according to Knight Frank.
Merrill Lynch & Co. Inc., the world's biggest brokerage, is considering a sale and leaseback of its London headquarters building to take advantage of record property prices in the city. GIC Real Estate Private Ltd., the real estate investment arm of the Government of Singapore, may buy the building for about 600 million pounds, the Financial Times reported earlier this month. Neither Merrill Lynch nor GIC would comment on the report.
In February, the London office tower dubbed ``the Gherkin'' was bought by IVG Immobilien AG and Evans Randall Investment Management Ltd. for 600 million pounds. The Gherkin was also designed by Foster.
CB Richard Ellis Inc. and Freshfields LLC advised HSBC on the sale of the property.
Sphere: Related Content
Thursday, May 03, 2007
Sunday, April 29, 2007
Travelodge Completes £128m Sale Leaseback of 17 UK Hotels
The Times - April 28, 2007
Travelodge, the budget hotel operator controlled by Dubai International Capital (DIC), has raised £128 million through a sale and leaseback of 17 of its hotels, The Times has learnt.
The company, which operates 314 hotels, the majority in the UK, is selling the underlying property assets to Prestbury, the property investment vehicle controlled by Nick Leslau. It will lease back the hotels for periods of between 25 years and 35 years.
It is the second sale and leaseback Travelodge has signed with Prestbury. Three years ago it raised £400 million from the dispsoal of 136 hotels to Mr Leslau’s vehicle, enbling it to step up its rapid rate of expansion. The 17 hotels in the latest deal, two of which are in London, are properties that have been added to the chain since the first transaction. About £100 million of the proceeds will be used to reduce Travelodge’s £500 million debt burden, with the balance to be invested in expansion.
Mr Leslau is expected to inject both packages of Travelodge properties into the £2 billion real estate investment trust (Reit) that he is planning to float on the London Stock Exchange. The Reit also includes properties run by Punch Taverns and Southern Cross Healthcare. Sphere: Related Content
Travelodge, the budget hotel operator controlled by Dubai International Capital (DIC), has raised £128 million through a sale and leaseback of 17 of its hotels, The Times has learnt.
The company, which operates 314 hotels, the majority in the UK, is selling the underlying property assets to Prestbury, the property investment vehicle controlled by Nick Leslau. It will lease back the hotels for periods of between 25 years and 35 years.
It is the second sale and leaseback Travelodge has signed with Prestbury. Three years ago it raised £400 million from the dispsoal of 136 hotels to Mr Leslau’s vehicle, enbling it to step up its rapid rate of expansion. The 17 hotels in the latest deal, two of which are in London, are properties that have been added to the chain since the first transaction. About £100 million of the proceeds will be used to reduce Travelodge’s £500 million debt burden, with the balance to be invested in expansion.
Mr Leslau is expected to inject both packages of Travelodge properties into the £2 billion real estate investment trust (Reit) that he is planning to float on the London Stock Exchange. The Reit also includes properties run by Punch Taverns and Southern Cross Healthcare. Sphere: Related Content
Threshers Completes £200 Million Sale Leaseback of Retail Portfolio
Telegraph - April 27, 2007
Guy Hands' private equity house Terra Firma has raised £200m from the sale-and-leaseback of part of the property estate of off-licence chain Threshers.
It is understood that Terra Firma, which this week pulled out of the race to buy Alliance Boots, raised the money through a number of tranches of property sales earlier this year and late last year. But it is known that those sales have now come to an end and it is thought no further sell-offs are planned at the moment.
Terra Firma first invested in the Thresher Group in October 2000, buying it from Whitbread and Punch for £225m. Since then it has been reinvented somewhat, and has expanded organically and through site acquisitions, the most recent being the December 2005 purchase of 200 former Unwins stores.
Through its various retail brands - which include Wine Rack and Haddows in Scotland - the business owns 2,000 shops and employs more than 12,000 people.
It is not thought that the sale-and-leasebacks, masterminded by Threshers' property director Stephen Masters, are likely to lead to any form of corporate action involving a trade sale or a float. However, given the length of time Terra Firma has owned the business, nothing should be ruled out. Sphere: Related Content
Guy Hands' private equity house Terra Firma has raised £200m from the sale-and-leaseback of part of the property estate of off-licence chain Threshers.
It is understood that Terra Firma, which this week pulled out of the race to buy Alliance Boots, raised the money through a number of tranches of property sales earlier this year and late last year. But it is known that those sales have now come to an end and it is thought no further sell-offs are planned at the moment.
Terra Firma first invested in the Thresher Group in October 2000, buying it from Whitbread and Punch for £225m. Since then it has been reinvented somewhat, and has expanded organically and through site acquisitions, the most recent being the December 2005 purchase of 200 former Unwins stores.
Through its various retail brands - which include Wine Rack and Haddows in Scotland - the business owns 2,000 shops and employs more than 12,000 people.
It is not thought that the sale-and-leasebacks, masterminded by Threshers' property director Stephen Masters, are likely to lead to any form of corporate action involving a trade sale or a float. However, given the length of time Terra Firma has owned the business, nothing should be ruled out. Sphere: Related Content
Thursday, April 26, 2007
Jardiland Completes €242 Million Sale Leaseback of 57 Gardening Centers in France
Fonciere des Murs Web Site - April 24, 2007
Fonciere des Murs has signed a memorandum of understanding to acquire a portfolio of 57 gardening centres operated by the Jardiland group for €242m, including transfer duties and transaction costs. The property assets, operated by the leading garden centre retail chain in France, are located across the country and represent two thirds of Jardiland's garden centre asset base.
Triple net leases were signed on the properties for a firm period of 12 years. The leases, which may be renewed up three times every nine years, carry indexed fixed rents representing annual rental income of €15.2m (i.e. a 6.3% cap rate), net of VAT.
A partnership agreement will be drawn up as part of the transaction enabling Jardiland to benefit from Fonciere des Murs' skills in forging partnerships, to accommodate Jardiland's growth. The transaction will be carried out in the form of a sale and leaseback operation. Sphere: Related Content
Fonciere des Murs has signed a memorandum of understanding to acquire a portfolio of 57 gardening centres operated by the Jardiland group for €242m, including transfer duties and transaction costs. The property assets, operated by the leading garden centre retail chain in France, are located across the country and represent two thirds of Jardiland's garden centre asset base.
Triple net leases were signed on the properties for a firm period of 12 years. The leases, which may be renewed up three times every nine years, carry indexed fixed rents representing annual rental income of €15.2m (i.e. a 6.3% cap rate), net of VAT.
A partnership agreement will be drawn up as part of the transaction enabling Jardiland to benefit from Fonciere des Murs' skills in forging partnerships, to accommodate Jardiland's growth. The transaction will be carried out in the form of a sale and leaseback operation. Sphere: Related Content
Wednesday, April 25, 2007
Citibank Seeking Sale Leaseback of 24 Bank Branches in New York City Area
GlobeSt.com - April 24, 2007
Citigroup Global Markets Inc. is marketing a 24-branch sale-leaseback transaction through Newmark Knight Frank. The properties are all centered in the New York City metro area.
“The portfolio consists of 214,000 sf,” says Kenneth Zakin, senior managing director of NKF. “Thirteen of the properties are leased only to Citibank, and 11 are anchored by Citibank but have other retail or office tenants. Each building, once sold, will be leased back to Citibank for 15 years, on separate leases. We’re offering the buildings as a package, or as individual properties, or they could be broken up into several smaller portfolios.”
Zakin tells GlobeSt.com that four of the properties are located in Manhattan, Brooklyn houses six locations, Queens four, the Bronx three, Westchester one, and the remaining properties are in Nassau and Suffolk counties. The properties range in size from 2,500 sf to 30,000 sf. Zakin says the best sites are those located in Manhattan. “They are really extraordinary branches.”
There is no asking price for the portfolio as the deal will be conducted through a bidding process. The initial bids will be collected by the end of the month, Zakin says. He expects bidders to be varied due to the quality of the portfolio.
He goes on to say, “This is an especially attractive portfolio in that you very rarely see so much space, so diversified by location throughout the New York metro area, all of it occupied by a credit tenant like Citibank, which is rated AA+ by Standard & Poor’s and Aaa by Moody’s,” Zakin remarks. Sphere: Related Content
Citigroup Global Markets Inc. is marketing a 24-branch sale-leaseback transaction through Newmark Knight Frank. The properties are all centered in the New York City metro area.
“The portfolio consists of 214,000 sf,” says Kenneth Zakin, senior managing director of NKF. “Thirteen of the properties are leased only to Citibank, and 11 are anchored by Citibank but have other retail or office tenants. Each building, once sold, will be leased back to Citibank for 15 years, on separate leases. We’re offering the buildings as a package, or as individual properties, or they could be broken up into several smaller portfolios.”
Zakin tells GlobeSt.com that four of the properties are located in Manhattan, Brooklyn houses six locations, Queens four, the Bronx three, Westchester one, and the remaining properties are in Nassau and Suffolk counties. The properties range in size from 2,500 sf to 30,000 sf. Zakin says the best sites are those located in Manhattan. “They are really extraordinary branches.”
There is no asking price for the portfolio as the deal will be conducted through a bidding process. The initial bids will be collected by the end of the month, Zakin says. He expects bidders to be varied due to the quality of the portfolio.
He goes on to say, “This is an especially attractive portfolio in that you very rarely see so much space, so diversified by location throughout the New York metro area, all of it occupied by a credit tenant like Citibank, which is rated AA+ by Standard & Poor’s and Aaa by Moody’s,” Zakin remarks. Sphere: Related Content
Mercury Computer Systems Announces $26.5 Million Sale Leaseback of HQ in Chelmsford, MA
Mercury Computer Systems Web Site - April 23, 2007
Mercury Computer Systems, Inc. (NASDAQ: MRCY) announced the completion of the sale and leaseback of its property located in Chelmsford, MA. The company received net cash proceeds of approximately $26.5 million from the sale of the property. The transaction includes a leaseback agreement with an initial term of 10 years, plus multiple renewal options. The property will continue to house Mercury’s corporate headquarters.
April 23, 2007 8-K Filing The annual rent for the first five years is $1,945,933.50 (7.35% cap rate) and increases by 10% for the remaining five years. The company also delivered a security deposit in the form of a $3,000,000 standby letter of credit which will remain in effect for the entire term of the lease. Sphere: Related Content
Mercury Computer Systems, Inc. (NASDAQ: MRCY) announced the completion of the sale and leaseback of its property located in Chelmsford, MA. The company received net cash proceeds of approximately $26.5 million from the sale of the property. The transaction includes a leaseback agreement with an initial term of 10 years, plus multiple renewal options. The property will continue to house Mercury’s corporate headquarters.
April 23, 2007 8-K Filing The annual rent for the first five years is $1,945,933.50 (7.35% cap rate) and increases by 10% for the remaining five years. The company also delivered a security deposit in the form of a $3,000,000 standby letter of credit which will remain in effect for the entire term of the lease. Sphere: Related Content
Sunday, April 22, 2007
Pierre & Vacances Planning Sale Leaseback of Four Holiday Villages in Belgium
Pierre & Vacances Web Site - April 20, 2007
Pierre & Vacances Group has reached an agreement to acquire Belgian group Sunparks. The acquisition fits entirely with the core focus of the development strategy in place at Center Parcs Europe by bolstering its positions, adding four holiday villages similar to Center Parcs, in the three/four star category in Belgium.
Sunparks owns the freehold and operations of four holiday villages similar to Center Parcs, in thethree/four star category. Two villages are located in seaside resorts in the North Sea, one in the Ardennes region and one in Campine. The group offers a total of 1,683 cottages and 50 hotel rooms as well as a number of covered central facilities (aqua-centre, restaurant, supermarket, childrens’ play centres etc.), and open-air sports complexes.
Center Parcs Europe currently operates 16 villages, 12 of which in the five-star category and four in the three/four-star category.
The acquisition of Sunparks is based on an enterprise value (including debt) of €150 million. In line with the group’s policy not to own the assets it operates, the Sunparks assets are likely to be sold off before the end of the year as part of a sale and lease-back operation currently being negotiated. Sphere: Related Content
Pierre & Vacances Group has reached an agreement to acquire Belgian group Sunparks. The acquisition fits entirely with the core focus of the development strategy in place at Center Parcs Europe by bolstering its positions, adding four holiday villages similar to Center Parcs, in the three/four star category in Belgium.
Sunparks owns the freehold and operations of four holiday villages similar to Center Parcs, in thethree/four star category. Two villages are located in seaside resorts in the North Sea, one in the Ardennes region and one in Campine. The group offers a total of 1,683 cottages and 50 hotel rooms as well as a number of covered central facilities (aqua-centre, restaurant, supermarket, childrens’ play centres etc.), and open-air sports complexes.
Center Parcs Europe currently operates 16 villages, 12 of which in the five-star category and four in the three/four-star category.
The acquisition of Sunparks is based on an enterprise value (including debt) of €150 million. In line with the group’s policy not to own the assets it operates, the Sunparks assets are likely to be sold off before the end of the year as part of a sale and lease-back operation currently being negotiated. Sphere: Related Content
Saturday, April 14, 2007
Joe’s Crab Shack Completes Sale Leaseback of 29 Restaurants
Memphis Daily News - April 12, 2007
A local Joe’s Crab Shack site is among 29 that have been bought by Princeton, N.J.-based Sovereign Investment Co.
The private principal equity investment firm, working under the name Sovereign JCS II LLC, paid $2.5 million for the Joe’s real estate at 7990 Horizon Blvd. in The Commons at Wolfchase shopping center. In conjunction, a $2.8 million loan was filed through BMO Capital Markets Corp. The seller was J.H. Whitney Capital Partners Inc. under an entity named Joe’s Crab Shack Real Estate Holding Inc.
The restaurant was among 120 Joe’s affected by a 2006 sell-off by Joe’s parent company Landry’s Restaurants Inc. Of the 120, the 29 in the Sovereign portfolio include all the locations for which Joe’s parent company owned the sites, said Sovereign’s vice president of acquisitions Barry Bain, emphasizing the purchase included only the real estate on which the restaurants are located. “The others were already leased stores (and) these were the only remaining 29 which the real estate was owned, so we purchased the real estate and leased it back to them on a long-term basis,” Bain said.
“We’re going to be selling some of the locations to retail investors, 1031 exchange buyers. ... (The Memphis) one will be sold as well eventually, probably within the next 12 months,” he said. Sphere: Related Content
A local Joe’s Crab Shack site is among 29 that have been bought by Princeton, N.J.-based Sovereign Investment Co.
The private principal equity investment firm, working under the name Sovereign JCS II LLC, paid $2.5 million for the Joe’s real estate at 7990 Horizon Blvd. in The Commons at Wolfchase shopping center. In conjunction, a $2.8 million loan was filed through BMO Capital Markets Corp. The seller was J.H. Whitney Capital Partners Inc. under an entity named Joe’s Crab Shack Real Estate Holding Inc.
The restaurant was among 120 Joe’s affected by a 2006 sell-off by Joe’s parent company Landry’s Restaurants Inc. Of the 120, the 29 in the Sovereign portfolio include all the locations for which Joe’s parent company owned the sites, said Sovereign’s vice president of acquisitions Barry Bain, emphasizing the purchase included only the real estate on which the restaurants are located. “The others were already leased stores (and) these were the only remaining 29 which the real estate was owned, so we purchased the real estate and leased it back to them on a long-term basis,” Bain said.
“We’re going to be selling some of the locations to retail investors, 1031 exchange buyers. ... (The Memphis) one will be sold as well eventually, probably within the next 12 months,” he said. Sphere: Related Content
Coles Group Ponders $100 Million in Sale Leaseback Deal in Australia
Sydney Morning Herald - April 14, 2007
Any new owner of Coles Group could make a very quick $100 million-plus through the sale of properties the retailer has on in its books.
And given the scarcity of supply of retail properties across the country, all the major property trusts such as Westfield, Stockland, GPT, Mirvac and CFS Retail, and possibly some smaller players, would snap up the sites without hesitation.
Big private equity players, which along with Wesfarmers are showing interest in the Coles auction, are quick to review the status of idle assets, such as land and buildings, and put them on the market. It is the cheapest and quickest way to raise cash.
A review of Coles's portfolio shows it has in excess of $100 million of property sitting on its balance sheet, predominantly in NSW. The group also has shopping centres in Western Australia and Victoria.
But it has made no secret of its hopes to follow other businesses in selling the property and leasing it back, then using the cash to expand its core retail operations.
Already the landlords are in the market vying for Myer's landmark Melbourne CBD complex in a sale expected to be worth up to $450 million.
Westfield is said to be firming up as the favourite, although GPT is also very keen given its ownership of the nearby Melbourne Central shopping centre between Elizabeth and La Trobe streets in Melbourne.
Myer, which will lease back the property, said at its results presentation recently that it was willing to pay $18.25 million in annual rent. Myer's chairman, Bill Wavish, said the new owner should be known mid-year.
Myer is also selling some of its last remaining property assets: stores at Dubbo, Wagga Wagga and Bendigo and will also lease back the three stores. The portfolio is expected to fetch up to $55 million. Sphere: Related Content
Any new owner of Coles Group could make a very quick $100 million-plus through the sale of properties the retailer has on in its books.
And given the scarcity of supply of retail properties across the country, all the major property trusts such as Westfield, Stockland, GPT, Mirvac and CFS Retail, and possibly some smaller players, would snap up the sites without hesitation.
Big private equity players, which along with Wesfarmers are showing interest in the Coles auction, are quick to review the status of idle assets, such as land and buildings, and put them on the market. It is the cheapest and quickest way to raise cash.
A review of Coles's portfolio shows it has in excess of $100 million of property sitting on its balance sheet, predominantly in NSW. The group also has shopping centres in Western Australia and Victoria.
But it has made no secret of its hopes to follow other businesses in selling the property and leasing it back, then using the cash to expand its core retail operations.
Already the landlords are in the market vying for Myer's landmark Melbourne CBD complex in a sale expected to be worth up to $450 million.
Westfield is said to be firming up as the favourite, although GPT is also very keen given its ownership of the nearby Melbourne Central shopping centre between Elizabeth and La Trobe streets in Melbourne.
Myer, which will lease back the property, said at its results presentation recently that it was willing to pay $18.25 million in annual rent. Myer's chairman, Bill Wavish, said the new owner should be known mid-year.
Myer is also selling some of its last remaining property assets: stores at Dubbo, Wagga Wagga and Bendigo and will also lease back the three stores. The portfolio is expected to fetch up to $55 million. Sphere: Related Content
HSBC Signs Build-to-Suit Agreement for HQ Annex in Kuala Lumpur
Malaysia Star - April 11, 2007
HSBC Bank Malaysia Bhd does not easily forget its roots as proven by its decision to remain at the spot it started 123 years ago.
Rather than relocate to newer and bigger premises to cater to further business expansion, it has chosen to lease a new 24-storey building that will be an annexe to its current headquarters in Leboh Ampang, Kuala Lumpur.
Deputy chairman and chief executive officer Datuk Zarir J. Cama said: “This (Leboh Ampang) was the spot on which HSBC started 123 years ago and we have really prospered during these years. “Our feng shui here has been very good and I am not going to disrupt it.” He said it was much more cost effective for the group to refurbish and rent a new building than to move to another place.
Zarir was speaking after signing an agreement with Quill group of companies on the lease for the new HSBC building yesterday. The Quill group will design and build the 265,000-sq-ft building and then lease it to HSBC. Besides the annexe, the HSBC headquarters will also get a facelift.
Quill group executive director Datuk Michael Ong said HSBC Malaysia would be taking a 15-year lease on the Grade A office building, which is expected to cost RM100mil to develop. Construction is expected to start in June for completion by the first quarter 2010. Sphere: Related Content
HSBC Bank Malaysia Bhd does not easily forget its roots as proven by its decision to remain at the spot it started 123 years ago.
Rather than relocate to newer and bigger premises to cater to further business expansion, it has chosen to lease a new 24-storey building that will be an annexe to its current headquarters in Leboh Ampang, Kuala Lumpur.
Deputy chairman and chief executive officer Datuk Zarir J. Cama said: “This (Leboh Ampang) was the spot on which HSBC started 123 years ago and we have really prospered during these years. “Our feng shui here has been very good and I am not going to disrupt it.” He said it was much more cost effective for the group to refurbish and rent a new building than to move to another place.
Zarir was speaking after signing an agreement with Quill group of companies on the lease for the new HSBC building yesterday. The Quill group will design and build the 265,000-sq-ft building and then lease it to HSBC. Besides the annexe, the HSBC headquarters will also get a facelift.
Quill group executive director Datuk Michael Ong said HSBC Malaysia would be taking a 15-year lease on the Grade A office building, which is expected to cost RM100mil to develop. Construction is expected to start in June for completion by the first quarter 2010. Sphere: Related Content
Friday, April 06, 2007
Microsoft Preleases 1.3 Million Sq. Ft. in Five Buildings Under Construction in Bellevue, WA
GlobeSt.com - April 6, 2007
Microsoft Corp. on Thursday said it has inked long-term leases for the entirety of two under-construction office developments here totaling 1.3 million sf. Headquartered in the neighboring Redmond, the public software company says it has leased the 740,000-sf Bravern Office Commons next to Meydenbauer Center in Downtown Bellevue and the 600,000-sf Advanta Office Commons adjacent to Interstate 90 in southeast Bellevue.
Tom Bohman, senior director of the Bellevue office of Cushman & Wakefield, tells GlobeSt.com the lease is the largest one-time transaction in the history of not just Bellevue but the entire Seattle region. Rental rates may also set a record in the near future.
The exact length of Microsoft’s commitment, the negotiated lease rates and the concession package were not released by the parties involved and not otherwise immediately available. The asking full-service rental rate for the Advanta development was approximately $35 per sf per year. The asking net lease rate for Bravern was $25 to $28 per sf, which would put the full-service rate (building services and parking) there above $40 per sf. Microsoft surely received a healthy bulk discount, say local brokers. "To unload something of that size, [Schnitzer Northwest] had to have reasonable market terms," says one source.
Microsoft says its leasing activity is in addition to plans for an accelerated expansion of its headquarters campus that were announced in February 2006. Later in 2006, the company leased 320,000 sf at Kemper Development's newest Downtown development Lincoln Square and another 87,000 sf at Eastpointe Corporate Center.
“Microsoft continues to grow at a rapid pace…,” says the company’s general manager of real estate Chris Owens. “Adding additional work space in Puget Sound, the company’s center of gravity, helps address our current space limitations and ensures that we are prepared for future growth.”
Microsoft likely will begin occupying Advanta late this year and the Bravern late next year. The two projects are developments of Schnitzer Northwest LLC, a Bellevue-based partnership that includes Portland, OR-based Schnitzer Investment Corp. and Dan Ivanoff. Sphere: Related Content
Microsoft Corp. on Thursday said it has inked long-term leases for the entirety of two under-construction office developments here totaling 1.3 million sf. Headquartered in the neighboring Redmond, the public software company says it has leased the 740,000-sf Bravern Office Commons next to Meydenbauer Center in Downtown Bellevue and the 600,000-sf Advanta Office Commons adjacent to Interstate 90 in southeast Bellevue.
Tom Bohman, senior director of the Bellevue office of Cushman & Wakefield, tells GlobeSt.com the lease is the largest one-time transaction in the history of not just Bellevue but the entire Seattle region. Rental rates may also set a record in the near future.
The exact length of Microsoft’s commitment, the negotiated lease rates and the concession package were not released by the parties involved and not otherwise immediately available. The asking full-service rental rate for the Advanta development was approximately $35 per sf per year. The asking net lease rate for Bravern was $25 to $28 per sf, which would put the full-service rate (building services and parking) there above $40 per sf. Microsoft surely received a healthy bulk discount, say local brokers. "To unload something of that size, [Schnitzer Northwest] had to have reasonable market terms," says one source.
Microsoft says its leasing activity is in addition to plans for an accelerated expansion of its headquarters campus that were announced in February 2006. Later in 2006, the company leased 320,000 sf at Kemper Development's newest Downtown development Lincoln Square and another 87,000 sf at Eastpointe Corporate Center.
“Microsoft continues to grow at a rapid pace…,” says the company’s general manager of real estate Chris Owens. “Adding additional work space in Puget Sound, the company’s center of gravity, helps address our current space limitations and ensures that we are prepared for future growth.”
Microsoft likely will begin occupying Advanta late this year and the Bravern late next year. The two projects are developments of Schnitzer Northwest LLC, a Bellevue-based partnership that includes Portland, OR-based Schnitzer Investment Corp. and Dan Ivanoff. Sphere: Related Content
AT&T Completes $53 Million Sale Leaseback of Cleveland Office Tower
The Plain Dealer - April 5, 2007
The latest prize in what has become a derby for downtown Cleveland office property: the 16-story AT&T building at Erieview Plaza.
Inland American Real Estate Trust Inc. of Chicago has paid $53 million for the San Antonio phone company's Northeast Ohio base, AT&T spokesman Bob Beasley said. The deal includes more than 450,000 square feet of office space and an attached 290-space garage.
AT&T will keep its roughly 1,100 employees - mostly administrative and call-center workers - in the building for at least 10 years as part of the sale-leaseback deal.
Previously known to Cleveland-area customers as SBC Communications, Ameritech and Ohio Bell, AT&T had amassed a surplus of property through a series of mergers. Beasley noted the company does not own its national headquarters campus in San Antonio.
More significant to the local real estate market, the AT&T building is the latest in a line of downtown office complexes to change hands. Since 2005, new owners collectively have spent more than $500 million on five properties, including the city's top trophies: the BP and Key towers.
Other downtown office towers that have sold include Fifth Third Center and the old East Ohio Gas Building. Another, Eaton Center, was put on the market in January.
"This is the best market I've seen in years," said David Browning, regional managing director for CB Richard Ellis, the firm that represented AT&T in the deal. Sphere: Related Content
The latest prize in what has become a derby for downtown Cleveland office property: the 16-story AT&T building at Erieview Plaza.
Inland American Real Estate Trust Inc. of Chicago has paid $53 million for the San Antonio phone company's Northeast Ohio base, AT&T spokesman Bob Beasley said. The deal includes more than 450,000 square feet of office space and an attached 290-space garage.
AT&T will keep its roughly 1,100 employees - mostly administrative and call-center workers - in the building for at least 10 years as part of the sale-leaseback deal.
Previously known to Cleveland-area customers as SBC Communications, Ameritech and Ohio Bell, AT&T had amassed a surplus of property through a series of mergers. Beasley noted the company does not own its national headquarters campus in San Antonio.
More significant to the local real estate market, the AT&T building is the latest in a line of downtown office complexes to change hands. Since 2005, new owners collectively have spent more than $500 million on five properties, including the city's top trophies: the BP and Key towers.
Other downtown office towers that have sold include Fifth Third Center and the old East Ohio Gas Building. Another, Eaton Center, was put on the market in January.
"This is the best market I've seen in years," said David Browning, regional managing director for CB Richard Ellis, the firm that represented AT&T in the deal. Sphere: Related Content
Natrol Completes $26 Million Sale Leaseback of HQ in CA
Natrol Web Site - April 5, 2007
Natrol, Inc. (Nasdaq: NTOL), a premier manufacturer and marketer of nationally branded nutritional products, today announced that it has closed on a sale/leaseback transaction with an affiliate of TA Associates Realty for its corporate headquarters and shipping facilities, both located in Chatsworth, California. The sale price of the real estate was $26 million. After paying off the associated mortgage debt, taxes and expenses that relate to the transaction, the Company received approximately $12 million in free cash at closing.
“During the last year, we have been a disciplined company, building profits quarter by quarter,” said Wayne Bos, Natrol’s President and CEO when making the announcement. “We unlocked a hidden asset, our real estate. Twelve million dollars equates to approximately 30% of our current market capitalization. We believe that releasing the cash will help us drive capitalization up by utilizing what was a dormant resource to stimulate growth. We believe this will benefit our shareholders. We understand the importance of leveraging the cash generated to make the type of strategic investments to drive top line growth and meaningful profits.”
The Company will continue to occupy the two facilities, leasing back the space at market rates for a 5-year term, with two 5-year renewal options. Approximately half of the gain on the sale will be recorded in the second quarter of 2007. The remainder will be amortized over 5 years and will offset rental expenses per US GAAP rules. Sphere: Related Content
Natrol, Inc. (Nasdaq: NTOL), a premier manufacturer and marketer of nationally branded nutritional products, today announced that it has closed on a sale/leaseback transaction with an affiliate of TA Associates Realty for its corporate headquarters and shipping facilities, both located in Chatsworth, California. The sale price of the real estate was $26 million. After paying off the associated mortgage debt, taxes and expenses that relate to the transaction, the Company received approximately $12 million in free cash at closing.
“During the last year, we have been a disciplined company, building profits quarter by quarter,” said Wayne Bos, Natrol’s President and CEO when making the announcement. “We unlocked a hidden asset, our real estate. Twelve million dollars equates to approximately 30% of our current market capitalization. We believe that releasing the cash will help us drive capitalization up by utilizing what was a dormant resource to stimulate growth. We believe this will benefit our shareholders. We understand the importance of leveraging the cash generated to make the type of strategic investments to drive top line growth and meaningful profits.”
The Company will continue to occupy the two facilities, leasing back the space at market rates for a 5-year term, with two 5-year renewal options. Approximately half of the gain on the sale will be recorded in the second quarter of 2007. The remainder will be amortized over 5 years and will offset rental expenses per US GAAP rules. Sphere: Related Content
Cable & Wireless Enters £88 Million Sale Leaseback of Nine Network Properties
Cable & Wireless Web Site - April 2, 2007
Cable & Wireless announces that it has today completed a 25 year sale and leaseback agreement with British Land of a portion of its property portfolio. The deal covers nine properties used as network sites in the UK. Cable & Wireless will receive £88m.
Lease payments for the first five years will be £4.54m per year and subject to five yearly reviews thereafter. These amounts were not included in Cable & Wireless’ cash guidance of November 8 2006.
Jim Marsh, CEO of Cable & Wireless UK, said: “Our number one priority is to deliver excellent service to our top end customers. We’re transforming our business to do just that – and as part of that transformation, we’ve taken a close look at all of our assets.
“This deal makes good commercial sense in that it takes advantage of the buoyant property market and releases capital to the business.” Sphere: Related Content
Cable & Wireless announces that it has today completed a 25 year sale and leaseback agreement with British Land of a portion of its property portfolio. The deal covers nine properties used as network sites in the UK. Cable & Wireless will receive £88m.
Lease payments for the first five years will be £4.54m per year and subject to five yearly reviews thereafter. These amounts were not included in Cable & Wireless’ cash guidance of November 8 2006.
Jim Marsh, CEO of Cable & Wireless UK, said: “Our number one priority is to deliver excellent service to our top end customers. We’re transforming our business to do just that – and as part of that transformation, we’ve taken a close look at all of our assets.
“This deal makes good commercial sense in that it takes advantage of the buoyant property market and releases capital to the business.” Sphere: Related Content
Thursday, April 05, 2007
Deutsche Securities Creates Fund Seeking Sale Leasebacks With Hospitals in Japan
MarketWatch - April 3, 2007
Deutsche Securities said Tuesday it will establish an investment fund specializing in hospital real estate management in collaboration with Itochu Corp. by the end of this month as the Topix real estate investment trust, or REIT, index reached a new lifetime high Monday. The fund will be capitalized at Y300 million, with the two firms each committing Y100 million and the remainder coming from other parties.
"We are looking to set up a fund which can combine our financing know-how with Itochu's depth of experience in the Japanese healthcare field," said a spokesman for Deutsche in Tokyo. Although the Deutsche-Itochu venture is being set up initially as a private fund, a spokesman for the German financial firm said it was looking at the possibility of converting the fund into a REIT in the future.
Deutsche's latest foray into Japan's real estate market comes as the 4-year-old Topix REIT index hit a lifetime high of 2492.92 yesterday. It is up by more than 47% since the end of last September as investors flocked to the sector, attracted by the comparatively high-yields offered by REITs in Japan's ultra-low interest rate environment.
Deutsche said the fund, which will buy real estate from hospitals with the aim of managing properties and leasing them back to the hospitals, would give its investors' exposure to Japan's growing economic recovery outside its major cities. The venture also underscores growing interest among real estate investors in moving outside of central business district properties in Japan's major cities now that many of these areas are tapped out, say analysts.
The brokerage also said that real estate funds are increasingly having to look at alternatives "outside of Tokyo, where competition for properties is less intense and yields are higher." Sphere: Related Content
Deutsche Securities said Tuesday it will establish an investment fund specializing in hospital real estate management in collaboration with Itochu Corp. by the end of this month as the Topix real estate investment trust, or REIT, index reached a new lifetime high Monday. The fund will be capitalized at Y300 million, with the two firms each committing Y100 million and the remainder coming from other parties.
"We are looking to set up a fund which can combine our financing know-how with Itochu's depth of experience in the Japanese healthcare field," said a spokesman for Deutsche in Tokyo. Although the Deutsche-Itochu venture is being set up initially as a private fund, a spokesman for the German financial firm said it was looking at the possibility of converting the fund into a REIT in the future.
Deutsche's latest foray into Japan's real estate market comes as the 4-year-old Topix REIT index hit a lifetime high of 2492.92 yesterday. It is up by more than 47% since the end of last September as investors flocked to the sector, attracted by the comparatively high-yields offered by REITs in Japan's ultra-low interest rate environment.
Deutsche said the fund, which will buy real estate from hospitals with the aim of managing properties and leasing them back to the hospitals, would give its investors' exposure to Japan's growing economic recovery outside its major cities. The venture also underscores growing interest among real estate investors in moving outside of central business district properties in Japan's major cities now that many of these areas are tapped out, say analysts.
The brokerage also said that real estate funds are increasingly having to look at alternatives "outside of Tokyo, where competition for properties is less intense and yields are higher." Sphere: Related Content
Sunday, April 01, 2007
M&B to Raise £1.1 Billion in Sale Leaseback of UK Pub Estate?
Morning Advertiser - March 30, 2007
Mitchells & Butlers could follow the example of Tesco by creating a joint venture property company that crystalises property value but avoids a full conversion to a real estate investment trust, according to Deutsche Bank analyst Geof Collyer.
A move by M&B to copy the Tesco model would release as much as £950m - 220p a share -to hand back to shareholders, he said. Tesco banked £570m of cash last week after injecting sites worth £366m at book value into a joint venture with British Land. Both parties put in £80m of equity each and the properties were revalued at £650m and leased back to Tesco at an initial yield of 4.46%.
The deal was broadly profit-and-loss neutral with Tesco planning to return most of the £570m to shareholders. Tesco retained a call option that allows it to buy back the properties in ten years’ time.
Collyer said that M&B could sell 20% of its estate, worth £625m at 1999 book value, into a joint venture like the Tesco one and raise £1.1bn less the equity - around £137m - it injected into the joint venture. He added: “This would leave it with over £950m to hand back to shareholders. “This is equivalent to about 30% of the group’s current market capitalisation.
“This would leave M&B with scope for further asset revaluations - notably from the Whitbread pub conversions - and retain control over an estate that would be 70% freehold /30% leasehold with an option to buy back 20% in ten years’ time.”
Collyer noted the Tesco deal “seems to be a way of crystalising current property values whilst retaining at least 50% ownership and control over the properties versus a maximum of 10% ownership under a Reit structure”. Sphere: Related Content
Mitchells & Butlers could follow the example of Tesco by creating a joint venture property company that crystalises property value but avoids a full conversion to a real estate investment trust, according to Deutsche Bank analyst Geof Collyer.
A move by M&B to copy the Tesco model would release as much as £950m - 220p a share -to hand back to shareholders, he said. Tesco banked £570m of cash last week after injecting sites worth £366m at book value into a joint venture with British Land. Both parties put in £80m of equity each and the properties were revalued at £650m and leased back to Tesco at an initial yield of 4.46%.
The deal was broadly profit-and-loss neutral with Tesco planning to return most of the £570m to shareholders. Tesco retained a call option that allows it to buy back the properties in ten years’ time.
Collyer said that M&B could sell 20% of its estate, worth £625m at 1999 book value, into a joint venture like the Tesco one and raise £1.1bn less the equity - around £137m - it injected into the joint venture. He added: “This would leave it with over £950m to hand back to shareholders. “This is equivalent to about 30% of the group’s current market capitalisation.
“This would leave M&B with scope for further asset revaluations - notably from the Whitbread pub conversions - and retain control over an estate that would be 70% freehold /30% leasehold with an option to buy back 20% in ten years’ time.”
Collyer noted the Tesco deal “seems to be a way of crystalising current property values whilst retaining at least 50% ownership and control over the properties versus a maximum of 10% ownership under a Reit structure”. Sphere: Related Content
ABN Amro’s London HQ Nearing Sale for £180 Million
Citywire Blogs - March 30, 2007
From Property Week
ABN Amro’s London headquarters is to be bought by fund manager Prupim in a deal that will reflect one of the lowest ever yields in the City of London.
In an off-market deal that is expected to complete next week, the fund manager has paid more than £180m for the building at 250 Bishopsgate, at a yield close to 4%, from Mayfair-based investment bank Evans Randall.
Although buildings have been sold for lower than 4% in the City, they tend to have vacant floors or other asset management angles.
So what's the investment angle for Prupim when the yield is so meagre and you can more income (and less hassle) from a cash ISA?
Prupim’s property arm has been working with its fixed income team to buy buildings for its annuity business with long leases and index-linked rental increases that are let to companies with good credit ratings. Sphere: Related Content
From Property Week
ABN Amro’s London headquarters is to be bought by fund manager Prupim in a deal that will reflect one of the lowest ever yields in the City of London.
In an off-market deal that is expected to complete next week, the fund manager has paid more than £180m for the building at 250 Bishopsgate, at a yield close to 4%, from Mayfair-based investment bank Evans Randall.
Although buildings have been sold for lower than 4% in the City, they tend to have vacant floors or other asset management angles.
So what's the investment angle for Prupim when the yield is so meagre and you can more income (and less hassle) from a cash ISA?
Prupim’s property arm has been working with its fixed income team to buy buildings for its annuity business with long leases and index-linked rental increases that are let to companies with good credit ratings. Sphere: Related Content
Saturday, March 31, 2007
European Bank for Reconstruction and Development’s London HQ Offered at £387m Million
Property Week - March 29, 2007
British Land is carrying out the first-ever building sale at its £3.44bn Broadgate estate in the City of London.
The company has appointed DTZ to begin marketing this week of the European Bank for Reconstruction and Development’s office headquarters with an asking price of £387m and a net initial yield of 4.8%.
The 385,000 sq ft (35,770 sq m) building, formerly known as 175 Bishopsgate but now called 1 Exchange Square, is let at £52/sq ft (£559.73/sq m) for a further 15.75 years. British Land’s co-head of asset management Tim Roberts said the marketing would be ‘low key’ and targeted at institutional investors.
The sale is part of a new strategy instigated by chief executive Stephen Hester of recycling capital and selling assets with little asset management potential – in the last two years he has bought and sold £7bn of properties.
The EBRD building was chosen as the first to be sold at Broadgate because it has the longest lease and no opportunity for asset management. It will appeal to investors who want to tuck away a prime City office building, let to a company with a AAA-rated credit rating. Sphere: Related Content
British Land is carrying out the first-ever building sale at its £3.44bn Broadgate estate in the City of London.
The company has appointed DTZ to begin marketing this week of the European Bank for Reconstruction and Development’s office headquarters with an asking price of £387m and a net initial yield of 4.8%.
The 385,000 sq ft (35,770 sq m) building, formerly known as 175 Bishopsgate but now called 1 Exchange Square, is let at £52/sq ft (£559.73/sq m) for a further 15.75 years. British Land’s co-head of asset management Tim Roberts said the marketing would be ‘low key’ and targeted at institutional investors.
The sale is part of a new strategy instigated by chief executive Stephen Hester of recycling capital and selling assets with little asset management potential – in the last two years he has bought and sold £7bn of properties.
The EBRD building was chosen as the first to be sold at Broadgate because it has the longest lease and no opportunity for asset management. It will appeal to investors who want to tuck away a prime City office building, let to a company with a AAA-rated credit rating. Sphere: Related Content
Thursday, March 29, 2007
RTL Group Completes Sale Leaseback of Office Building Near Brussels
Belgian daily De Standaard reports that Cofinimmo SA will buy a recently completed office building in Schaarbeek, near Brussels, from German TV broadcaster RTL Group in a 15-year sale leaseback deal. The deal is expected to bring a substantial gain to RTL, which has invested 40 mln euro ($53.2 mln) in the building.
Sphere: Related Content
Monday, March 26, 2007
Sainsbury Signs Build-to-Suit for 530,000 SF Midlands Warehouse
Commercial Property News - February 8, 2007
Establishing an even larger foothold in the U.K. industrial market, Denver-based ProLogis has signed on to build a 530,000 square-foot warehouse for Sainsbury's, a prominent supermarket chain that will lease the building from the industrial property developer. The distribution center will be the first structure at ProLogis Park Pineham, which will cost ProLogis an estimated $150 million to $180 million to develop at the property's full buildout of approximately 1.6 million square feet.
Sainsbury's signed a multi-year triple-net lease with ProLogis, and will use the facility as a distribution center for its stores across central England. Located off the M1 motorway, which offers a coveted connection to the country's national motorway network, ProLogis Park Pineham occupies a 112-acre site in the Midlands. "The Midlands is the number one distribution area throughout the U.K. and ProLogis has a very strong presence there," a ProLogis spokesperson told CPN. "The contract is the first lease at the park and is highly indicative of the market."
The company expects to wrap up construction of Sainsbury's new building during the second half of this year. Sphere: Related Content
Establishing an even larger foothold in the U.K. industrial market, Denver-based ProLogis has signed on to build a 530,000 square-foot warehouse for Sainsbury's, a prominent supermarket chain that will lease the building from the industrial property developer. The distribution center will be the first structure at ProLogis Park Pineham, which will cost ProLogis an estimated $150 million to $180 million to develop at the property's full buildout of approximately 1.6 million square feet.
Sainsbury's signed a multi-year triple-net lease with ProLogis, and will use the facility as a distribution center for its stores across central England. Located off the M1 motorway, which offers a coveted connection to the country's national motorway network, ProLogis Park Pineham occupies a 112-acre site in the Midlands. "The Midlands is the number one distribution area throughout the U.K. and ProLogis has a very strong presence there," a ProLogis spokesperson told CPN. "The contract is the first lease at the park and is highly indicative of the market."
The company expects to wrap up construction of Sainsbury's new building during the second half of this year. Sphere: Related Content
National Grid Seeking £28 Million Sale Leaseback of Offices in Northampton
Estates Gazette reports that National Grid has put a second office building up for sale after the successful £60m sale-leaseback of its Warwick HQ. The group has put its 100,000 sq ft Lakeside House in Northampton on the market for £28m seeking a 5.47% yield in exchange for a 15-year lease on the property. GVA Grimley is reportedly advising National Grid on the sale.
Sphere: Related Content
Morrisons in Talks Over £1 Billion Sale Leaseback of 26 UK Store Portfolio
Reuters - March 25, 2007
WM Morrison Supermarkets (MRW.L) is in talks with property tycoons Sol and Eddie Zakay to sell 26 sites that could be worth up to 1 billion pounds, the Sunday Express reported. The paper cited no sources but said it would be the supermarket's first-ever deal to sell off stores.
Morrison signalled earlier this month it was ready to tap the value of its extensive property assets if it needed to fend off a takeover attempt, but said it had not received any approaches from private equity firms. Sphere: Related Content
WM Morrison Supermarkets (MRW.L) is in talks with property tycoons Sol and Eddie Zakay to sell 26 sites that could be worth up to 1 billion pounds, the Sunday Express reported. The paper cited no sources but said it would be the supermarket's first-ever deal to sell off stores.
Morrison signalled earlier this month it was ready to tap the value of its extensive property assets if it needed to fend off a takeover attempt, but said it had not received any approaches from private equity firms. Sphere: Related Content
Sunday, March 25, 2007
Schibsted Agrees to $54.5 Million Sale Leaseback of Office Building in Oslo
Schibsted Web Site - March 23, 2007
Schibsted ASA has, through its fully owned subsidiary Schibsted Eiendom AS, accepted an offer from Aberdeen Property Investors Norway AS, on behalf of a client, concerning the sale of an office building in Apotekergaten 10 in Oslo for NOK 334 million. The accounting gain for Schibsted will be slightly lower than NOK 200 million. Schibsted will enter into a lease agreement for seven years with the option to extend the agreement for five plus five years. A final agreement is under negotiation, and the transaction is expected to be finalized during the second quarter of 2007. Sphere: Related Content
Schibsted ASA has, through its fully owned subsidiary Schibsted Eiendom AS, accepted an offer from Aberdeen Property Investors Norway AS, on behalf of a client, concerning the sale of an office building in Apotekergaten 10 in Oslo for NOK 334 million. The accounting gain for Schibsted will be slightly lower than NOK 200 million. Schibsted will enter into a lease agreement for seven years with the option to extend the agreement for five plus five years. A final agreement is under negotiation, and the transaction is expected to be finalized during the second quarter of 2007. Sphere: Related Content
Cable & Wireless Pursuing £86 Million Sale Leaseback of Eight UK Properties
Property Week reports that Cable & Wireless has hired Doherty Baines to carry out an £86 million sale and leaseback of eight office and technical properties totaling 350,000 sq ft (32,515 sq m).
Sphere: Related Content
Goldman Sachs’ London HQ Sold for £355 Million
Jesta Capital Web Site - March 27, 2007
Goldman Sachs’ City HQ has been bought by one of Canada’s largest property companies. Jesta Capita has paid £355m for Tishman Speyer’s 370,000 sq ft Peterborough Court on 133 Fleet Street, EC4. The deal reflects a 5% yield.
Jesta, chaired by Elliott Aintabi, came to the UK in 2003. It has since bought the 150,000 sq ft 6-8 Bishopsgate, EC2, and the 75,000 sq ft 55 Old Broad Street, EC2. Peterborough Court is its most significant buy to date.
Tishman has owned the building since May 2005 when it bought it from Goldman Sachs for £280m. BH2 and Jones Lang LaSalle are joint selling agents on Peterborough Court. BH2 also advised on the sale of Fleetway House. Sphere: Related Content
Goldman Sachs’ City HQ has been bought by one of Canada’s largest property companies. Jesta Capita has paid £355m for Tishman Speyer’s 370,000 sq ft Peterborough Court on 133 Fleet Street, EC4. The deal reflects a 5% yield.
Jesta, chaired by Elliott Aintabi, came to the UK in 2003. It has since bought the 150,000 sq ft 6-8 Bishopsgate, EC2, and the 75,000 sq ft 55 Old Broad Street, EC2. Peterborough Court is its most significant buy to date.
Tishman has owned the building since May 2005 when it bought it from Goldman Sachs for £280m. BH2 and Jones Lang LaSalle are joint selling agents on Peterborough Court. BH2 also advised on the sale of Fleetway House. Sphere: Related Content
HSBC Gets 15 Bids for Canary Wharf HQ
The Times Online - March 24, 2007
HSBC has received 15 bids for its £1 billion Canary Wharf headquarters in a sale that could complete as early as next month.
Indicative offers for the building are understood to have come from firms including Evans Randall, the Mayfair-based boutique investment bank, IVG Immobilien of Germany, the new part-owners of the £600 million Swiss Re building, Active Asset Investment Management, the property fund managers backed by Sir Alex Ferguson and HBOS, as well as a number of billionaire Gulf investors and Far East property moguls.
The buyer will have to lease the building back to HSBC, which insists it will keep its global headquarters in Canary Wharf, in return for £43 million annual rent. The asking price of £1 billion covers 1.1 million sq ft of office space spread over 42 floors and four “basement levels” in what would be the largest single office sale in Britain.
Based on the rental income a £1 billion sales tag would mean the building offering a yield of just 4.25 per cent. The Swiss Re Tower, the most expensive single office block sale, was sold this year on a yield of 4.5 per cent.
Other potential bidders include Three Delta, the company owned by Qatar’s Foreign Minister, the Abu Dhabi royal family and the real estate arm of Dutch insurer ING.
A final shortlist of six bidders is due in six weeks. The building is to go under offer at the end of next month. Sphere: Related Content
HSBC has received 15 bids for its £1 billion Canary Wharf headquarters in a sale that could complete as early as next month.
Indicative offers for the building are understood to have come from firms including Evans Randall, the Mayfair-based boutique investment bank, IVG Immobilien of Germany, the new part-owners of the £600 million Swiss Re building, Active Asset Investment Management, the property fund managers backed by Sir Alex Ferguson and HBOS, as well as a number of billionaire Gulf investors and Far East property moguls.
The buyer will have to lease the building back to HSBC, which insists it will keep its global headquarters in Canary Wharf, in return for £43 million annual rent. The asking price of £1 billion covers 1.1 million sq ft of office space spread over 42 floors and four “basement levels” in what would be the largest single office sale in Britain.
Based on the rental income a £1 billion sales tag would mean the building offering a yield of just 4.25 per cent. The Swiss Re Tower, the most expensive single office block sale, was sold this year on a yield of 4.5 per cent.
Other potential bidders include Three Delta, the company owned by Qatar’s Foreign Minister, the Abu Dhabi royal family and the real estate arm of Dutch insurer ING.
A final shortlist of six bidders is due in six weeks. The building is to go under offer at the end of next month. Sphere: Related Content
Saturday, March 24, 2007
Kwik-Fit Completes €61.6 Million Sale leaseback of 141 Speedy Car Service Centers Across France
Europe Real Estate - March 22, 2007
LaSalle Investment Management has announced the purchase of 141 Speedy car service centers across France for a total of €61.6 million. The acquisition was made on behalf of LaSalle French Fund II, a €1.3-billion fund targeting emerging sector income, which is seeking further acquisitions providing rental income in the French automotive business.
The leaseback deal is guaranteed through Kwik-Fit, parent group to Speedy, the French tyre and exhaust market leader. The deal involves a 10-year lease and comprises approximately 50,600 m² across the 141 service centers. A first tranche of 110 centers was closed yesterday, with the remainder of the centers scheduled to close by July 2007.
Lasalle was advised by Colliers, Depardieu and Cheuvreux. Kwik-Fit was represented by Savills and Orrick. ABN AMRO provided banking finance for LaSalle. Sphere: Related Content
LaSalle Investment Management has announced the purchase of 141 Speedy car service centers across France for a total of €61.6 million. The acquisition was made on behalf of LaSalle French Fund II, a €1.3-billion fund targeting emerging sector income, which is seeking further acquisitions providing rental income in the French automotive business.
The leaseback deal is guaranteed through Kwik-Fit, parent group to Speedy, the French tyre and exhaust market leader. The deal involves a 10-year lease and comprises approximately 50,600 m² across the 141 service centers. A first tranche of 110 centers was closed yesterday, with the remainder of the centers scheduled to close by July 2007.
Lasalle was advised by Colliers, Depardieu and Cheuvreux. Kwik-Fit was represented by Savills and Orrick. ABN AMRO provided banking finance for LaSalle. Sphere: Related Content
Carrefour Pressured to Monetize $28.6 Billion Store Portfolio
New York Times - March 23, 2007
Carrefour, Europe’s answer to Wal-Mart and the world’s second-largest retailer, is in play. Last month, the American real estate investment firm Colony Capital and the richest man in France, Bernard Arnault, announced that they had acquired nearly 10 percent of Carrefour’s shares and hoped to translate that value into a fat capital gain.
Late last year, the investment group invited Mr. Arnault to join it in buying a stake in Carrefour with an eye toward capturing some of its hidden value. Mr. Arnault, worth $26 billion, is chairman of the fashion house Christian Dior and the luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton.
Colony Capital and Mr. Arnault are now talking to various members of the Halley family. They have been tight-lipped about their intentions. Colony Capital and Mr. Arnault have asked for two seats on Carrefour’s nonexecutive supervisory board, and the Halley family, which already has two seats on the seven-member board, asked for an additional seat of its own.
With interest rates low, property prices high and retail profits under pressure, aggressive investors are focusing on big retail chains across Europe because their depressed stock prices do not reflect the value of their real estate holdings.
Commercial real estate values in France have soared, even as the profit margins of retailers thinned. So while Carrefour’s stock price steadily lost half of its value since 1999, its underlying value — literally — has continued to swell. Now worth as much as 21.5 billion euros ($28.63 billion), according to Morgan Stanley, the real estate is too ripe to ignore.
Colony Capital has been active in France before. In May 2005, the firm invested 1 billion euros in Accor, the hotel and restaurant operator, helping the company build the value of its real estate. Accor’s stock price has nearly doubled since then.
If Colony Capital and Mr. Arnault are to get seats on the supervisory board, resolutions must be presented to shareholders three weeks before the company’s next shareholders meeting on April 30. Sphere: Related Content
Carrefour, Europe’s answer to Wal-Mart and the world’s second-largest retailer, is in play. Last month, the American real estate investment firm Colony Capital and the richest man in France, Bernard Arnault, announced that they had acquired nearly 10 percent of Carrefour’s shares and hoped to translate that value into a fat capital gain.
Late last year, the investment group invited Mr. Arnault to join it in buying a stake in Carrefour with an eye toward capturing some of its hidden value. Mr. Arnault, worth $26 billion, is chairman of the fashion house Christian Dior and the luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton.
Colony Capital and Mr. Arnault are now talking to various members of the Halley family. They have been tight-lipped about their intentions. Colony Capital and Mr. Arnault have asked for two seats on Carrefour’s nonexecutive supervisory board, and the Halley family, which already has two seats on the seven-member board, asked for an additional seat of its own.
With interest rates low, property prices high and retail profits under pressure, aggressive investors are focusing on big retail chains across Europe because their depressed stock prices do not reflect the value of their real estate holdings.
Commercial real estate values in France have soared, even as the profit margins of retailers thinned. So while Carrefour’s stock price steadily lost half of its value since 1999, its underlying value — literally — has continued to swell. Now worth as much as 21.5 billion euros ($28.63 billion), according to Morgan Stanley, the real estate is too ripe to ignore.
Colony Capital has been active in France before. In May 2005, the firm invested 1 billion euros in Accor, the hotel and restaurant operator, helping the company build the value of its real estate. Accor’s stock price has nearly doubled since then.
If Colony Capital and Mr. Arnault are to get seats on the supervisory board, resolutions must be presented to shareholders three weeks before the company’s next shareholders meeting on April 30. Sphere: Related Content
Corporate Sellers Find Success in Sale-Leaseback Deals
CoStar Group - March 21, 2007
Several big corporations continue to take advantage of the overheated investment sales market, choosing to give up their role as landlords and become tenants in choice properties across the country.
Among those seeking to cash out their real estate: Sun Microsystems is getting ready to hit the market near Boston with the sale of its property in Burlington, MA. The technology company has tapped Jones Lang LaSalle to market the property to prospective buyers. Pricing is expected to be in excess of $200 million, according to sources familiar with the offering.
Sun Microsystems will lease back more than half of the space for 10 years. It will also lease some additional space for one year as it transitions out of some of the space. The offering is said to have already generated intense interest among bidders and is expected to close in June.
Last year, Sun Microsystems, sold one of three large office complexes in the San Francisco area to BioMed Realty Trust Inc. for $215 million. As part of the deal, Sun Microsystems signed 10 short-term leases for the 10 buildings at its Newark, CA, campus with plans to exit the property in phases over an 18-month period. BioMed Realty plans to reposition the property for use by life science tenants.
"Everyone who owns a building now whose core business is not real estate is looking at monetization strategies like sale-leasebacks because the capital markets enable them to get higher returns, making sale-leasebacks a viable strategy," said Josh Hirsh, an investment sales broker with Studley's Atlanta office.
Proof that sale-leasebacks are gaining favor can be found in the number of such deals tracked by CoStar. Based on an analysis of sale comparables, the number of sale-leaseback deals more than quadrupled from first quarter in 2006 to year-end. While there were three sale-leaseback transactions totaling $106 million at the beginning of last year, in the fourth quarter, the volume of deals jumped up to 13 deals totaling about $952 million, according to CoStar Group information.
The trend is holding steady so far this year. Corporate users, especially those also going through rapid industry consolidation, are looking to take advantage of the unabated appetites of investors and unload some real estate assets to pour the money back into their core businesses.
AT&T offers a prime example. Late last year, AT&T did a $270 million sale-leaseback deal in Bedminster, NJ, selling its 879,000-square-foot headquarters property at 900 Route 202/206 to MetLife Inc.
It kicked off the year by selling the 42-story office tower at 909 Chestnut St. in St. Louis to MB REIT, Inland American Real Estate Trust Inc.'s venture with Minto Builders, for $204.9 million or about $136.60 per square foot.
And it recently sold a couple of Milwaukee-area properties to Inland Real Estate Acquisitions Inc. for $31.2 million in sale-leaseback transactions.
Meanwhile, JPMorgan Chase went back to the sales market and struck a deal last week to sell its 598,000-square-foot Chase Tower at 611 Woodward Ave. in downtown Detroit to local firm Sterling Group. The bank signed a 10-year lease with renewal options for about 215,000 square feet of space, saying it "made more sense to be a long-term tenant than owning the building."
Last October, the bank sold a portfolio of 33 properties to a fund managed by Toronto-based Brookfield Asset Management for about $460 million. JPMorgan leased back significant portions of the 5.3 million-square-foot portfolio. Sphere: Related Content
Several big corporations continue to take advantage of the overheated investment sales market, choosing to give up their role as landlords and become tenants in choice properties across the country.
Among those seeking to cash out their real estate: Sun Microsystems is getting ready to hit the market near Boston with the sale of its property in Burlington, MA. The technology company has tapped Jones Lang LaSalle to market the property to prospective buyers. Pricing is expected to be in excess of $200 million, according to sources familiar with the offering.
Sun Microsystems will lease back more than half of the space for 10 years. It will also lease some additional space for one year as it transitions out of some of the space. The offering is said to have already generated intense interest among bidders and is expected to close in June.
Last year, Sun Microsystems, sold one of three large office complexes in the San Francisco area to BioMed Realty Trust Inc. for $215 million. As part of the deal, Sun Microsystems signed 10 short-term leases for the 10 buildings at its Newark, CA, campus with plans to exit the property in phases over an 18-month period. BioMed Realty plans to reposition the property for use by life science tenants.
"Everyone who owns a building now whose core business is not real estate is looking at monetization strategies like sale-leasebacks because the capital markets enable them to get higher returns, making sale-leasebacks a viable strategy," said Josh Hirsh, an investment sales broker with Studley's Atlanta office.
Proof that sale-leasebacks are gaining favor can be found in the number of such deals tracked by CoStar. Based on an analysis of sale comparables, the number of sale-leaseback deals more than quadrupled from first quarter in 2006 to year-end. While there were three sale-leaseback transactions totaling $106 million at the beginning of last year, in the fourth quarter, the volume of deals jumped up to 13 deals totaling about $952 million, according to CoStar Group information.
The trend is holding steady so far this year. Corporate users, especially those also going through rapid industry consolidation, are looking to take advantage of the unabated appetites of investors and unload some real estate assets to pour the money back into their core businesses.
AT&T offers a prime example. Late last year, AT&T did a $270 million sale-leaseback deal in Bedminster, NJ, selling its 879,000-square-foot headquarters property at 900 Route 202/206 to MetLife Inc.
It kicked off the year by selling the 42-story office tower at 909 Chestnut St. in St. Louis to MB REIT, Inland American Real Estate Trust Inc.'s venture with Minto Builders, for $204.9 million or about $136.60 per square foot.
And it recently sold a couple of Milwaukee-area properties to Inland Real Estate Acquisitions Inc. for $31.2 million in sale-leaseback transactions.
Meanwhile, JPMorgan Chase went back to the sales market and struck a deal last week to sell its 598,000-square-foot Chase Tower at 611 Woodward Ave. in downtown Detroit to local firm Sterling Group. The bank signed a 10-year lease with renewal options for about 215,000 square feet of space, saying it "made more sense to be a long-term tenant than owning the building."
Last October, the bank sold a portfolio of 33 properties to a fund managed by Toronto-based Brookfield Asset Management for about $460 million. JPMorgan leased back significant portions of the 5.3 million-square-foot portfolio. Sphere: Related Content
Merrill Lynch Agrees to £600 Million Sale Leaseback of London HQ
FT Alphaville - March 22, 2007
GIC, the investment arm of the Singapore government, has been chosen as preferred bidder for the £600m London headquarters of Merrill Lynch near St Paul’s Cathedral. Although the US investment bank refused to comment, City sources said that GIC had this week secured the sale-and-leaseback on the 827,751 sq ft office block at 2 King Edward Street.
The group beat competition from a shortlist including Simon Halabi, the Syrian-born tycoon, and Derek Quinlan, the Irish investor.
Merrill is among several banks selling their London headquarters to take advantage of strong demand from property investors. Others include HSBC, which is in the early stages of finding a buyer for its £1bn tower in Canary Wharf.
The latest deals include the sale on Thursday of Goldman Sachs’ London headquarters on Fleet Street for £355m to Jesta, a Canadian property group. Sphere: Related Content
GIC, the investment arm of the Singapore government, has been chosen as preferred bidder for the £600m London headquarters of Merrill Lynch near St Paul’s Cathedral. Although the US investment bank refused to comment, City sources said that GIC had this week secured the sale-and-leaseback on the 827,751 sq ft office block at 2 King Edward Street.
The group beat competition from a shortlist including Simon Halabi, the Syrian-born tycoon, and Derek Quinlan, the Irish investor.
Merrill is among several banks selling their London headquarters to take advantage of strong demand from property investors. Others include HSBC, which is in the early stages of finding a buyer for its £1bn tower in Canary Wharf.
The latest deals include the sale on Thursday of Goldman Sachs’ London headquarters on Fleet Street for £355m to Jesta, a Canadian property group. Sphere: Related Content
Friday, March 23, 2007
Tesco Enters £1 Billion Sale Leaseback of 21 UK Superstores
TimesOnline - March 21, 2007
Tesco, the UK's largest retailer, has released more than £1 billion of capital from its bumper stores portfolio in less than three months, after striking a property joint venture with British Land that involves 21 of its superstores.
The deal, the fourth between the two companies, covers giant Tesco stores stretching from Ashford, Kent, to Hereford and Dundee in Scotland. It puts Tesco well on track to meet its target set last April of freeing up £5 billion of capital from its valuable property assets by the end of the decade.
It is expected that Tesco, which is sitting on property worth just under £16 billion at the last count, will unveil further sale and leaseback property deals before the end of the year.
Tesco's move follows a similar exercise undertaken last year by J Sainsbury, involving 127 of its supermarkets or, at £3.55 billion, approximately half the book value of its property assets. The UK's third-largest supermarket group used a mortgage-backed securities deal to raise £2 billion for debt refinancing purposes.
Today's deal sees Tesco and British Land set up a limited partnership joint venture on a 50/50 basis. Tesco banks profits of £142 million on proceeds of £570 million from selling the superstores to British Land. The retailer then pays British Land annual rent of £29 million secured against the stores, with payment increases linked to inflation but capped at 3.5 per cent a year for 20 years.
The deal, Tesco's second of the year, follows the deal in January with the British Airways pension fund that raised proceeds for the retailer of £445 million.
The latest move comes as Britain's retailers increasingly look to release value from their property assets, which have made them attractive to potential bidders but have also brought scrutiny from regulators.
Tesco has more property than any of its peers. Sphere: Related Content
Tesco, the UK's largest retailer, has released more than £1 billion of capital from its bumper stores portfolio in less than three months, after striking a property joint venture with British Land that involves 21 of its superstores.
The deal, the fourth between the two companies, covers giant Tesco stores stretching from Ashford, Kent, to Hereford and Dundee in Scotland. It puts Tesco well on track to meet its target set last April of freeing up £5 billion of capital from its valuable property assets by the end of the decade.
It is expected that Tesco, which is sitting on property worth just under £16 billion at the last count, will unveil further sale and leaseback property deals before the end of the year.
Tesco's move follows a similar exercise undertaken last year by J Sainsbury, involving 127 of its supermarkets or, at £3.55 billion, approximately half the book value of its property assets. The UK's third-largest supermarket group used a mortgage-backed securities deal to raise £2 billion for debt refinancing purposes.
Today's deal sees Tesco and British Land set up a limited partnership joint venture on a 50/50 basis. Tesco banks profits of £142 million on proceeds of £570 million from selling the superstores to British Land. The retailer then pays British Land annual rent of £29 million secured against the stores, with payment increases linked to inflation but capped at 3.5 per cent a year for 20 years.
The deal, Tesco's second of the year, follows the deal in January with the British Airways pension fund that raised proceeds for the retailer of £445 million.
The latest move comes as Britain's retailers increasingly look to release value from their property assets, which have made them attractive to potential bidders but have also brought scrutiny from regulators.
Tesco has more property than any of its peers. Sphere: Related Content
Kwik-Fit Agrees to £103.7 Million Sale Leaseback of 148 UK Service Centers
Easier Property - March 23, 2007
GE Real Estate UK and Paradigm Real Estate Managers (“PREM”) have created a leveraged joint venture to acquire 148 Kwik-Fit specialist fitting centres for £103.7 million reflecting a net initial yield of 5.3%.
The 148 property portfolio, which are located throughout the UK, have been acquired through a sale and leaseback transaction and are let to Kwik-Fit UK on 25 year leases with fixed uplifts in years 5 and 10. The properties are generally well-located in town centres and many offer redevelopment opportunities.
Simultaneous with the transaction, GE Real Estate and PREM have entered into a development agreement with Kwik-Fit, which will enable the joint venture to assess and pursue redevelopment schemes. Kwik-Fit will also have the opportunity to benefit from any redevelopment profit after the payment of a priority return to the Joint Venture.
Montagu Evans acted on behalf of the joint venture. Savills acted on behalf of Kwik-Fit. RBS provided debt finance for the transaction Sphere: Related Content
GE Real Estate UK and Paradigm Real Estate Managers (“PREM”) have created a leveraged joint venture to acquire 148 Kwik-Fit specialist fitting centres for £103.7 million reflecting a net initial yield of 5.3%.
The 148 property portfolio, which are located throughout the UK, have been acquired through a sale and leaseback transaction and are let to Kwik-Fit UK on 25 year leases with fixed uplifts in years 5 and 10. The properties are generally well-located in town centres and many offer redevelopment opportunities.
Simultaneous with the transaction, GE Real Estate and PREM have entered into a development agreement with Kwik-Fit, which will enable the joint venture to assess and pursue redevelopment schemes. Kwik-Fit will also have the opportunity to benefit from any redevelopment profit after the payment of a priority return to the Joint Venture.
Montagu Evans acted on behalf of the joint venture. Savills acted on behalf of Kwik-Fit. RBS provided debt finance for the transaction Sphere: Related Content
Thursday, March 22, 2007
Whitbread Plc in Play Over $8.8 Billion Property Portfolio?
Bloomberg.com - March 20, 2007
Shares of Whitbread Plc, the U.K. owner of the Premier Travel Inn budget lodging chain, had their biggest gain in 15 years on speculation the company may get a takeover bid worth about 4.5 billion pounds ($8.8 billion).
The shares advanced 193 pence, or 11 percent, to 1,934 pence in London, the biggest one-day gain since April 10, 1992. That raised the company's market value to about 3.81 billion pounds.
Citigroup Inc. analyst Charles Wilson said in a note yesterday that a break up of the company by a third party may realize value from the company's real estate. Whitbread has property assets worth 4.1 billion pounds, or 2,070 pence a share, according to Wilson, who has a ``buy'' rating on the stock.
Whitbread aims to open 3,000 more Premier Travel Inn hotel rooms in the U.K. next fiscal year after adding 2,500 this year, and to expand its Costa coffee-shop chain to about 2,000 stores from 650 in the next five years. Sphere: Related Content
Shares of Whitbread Plc, the U.K. owner of the Premier Travel Inn budget lodging chain, had their biggest gain in 15 years on speculation the company may get a takeover bid worth about 4.5 billion pounds ($8.8 billion).
The shares advanced 193 pence, or 11 percent, to 1,934 pence in London, the biggest one-day gain since April 10, 1992. That raised the company's market value to about 3.81 billion pounds.
Citigroup Inc. analyst Charles Wilson said in a note yesterday that a break up of the company by a third party may realize value from the company's real estate. Whitbread has property assets worth 4.1 billion pounds, or 2,070 pence a share, according to Wilson, who has a ``buy'' rating on the stock.
Whitbread aims to open 3,000 more Premier Travel Inn hotel rooms in the U.K. next fiscal year after adding 2,500 this year, and to expand its Costa coffee-shop chain to about 2,000 stores from 650 in the next five years. Sphere: Related Content
Wednesday, March 21, 2007
Are Lease Accounting Rules Due For An Overhaul?
Web CPA / Accounting Today - March 19, 2007
In March, the working group assembled by the Financial Accounting Standards Board and the International Accounting Standards Board will meet in London for the first time to make a comprehensive review of lease accounting rules.
Because transparency has been seriously compromised under the current rules, Grant Thornton believes that this review is critical and comes not a moment too soon.
The problem is that existing lease accounting rules permit assets (and the related financing liabilities) to be kept off the books, regardless of economic substance, as long as the form of the transaction stays within the bright lines of the rules. Those rules have expanded over the years to include 16 FASB statements and interpretations, 11 technical bulletins and staff positions, and at least 30 Emerging Issues Task Force abstracts. Only specialists can hope to navigate such complexity.
Although there are legitimate tax and legal advantages to lease financing, too many transactions are structured for the purpose of arriving at a desired accounting treatment. The resulting balance sheet does not present a complete and transparent financial picture. Basic analytical tools like return on investment and debt-to-equity ratios are useless when neither the investment nor the debt is on the books. Before conducting even elementary financial statement reviews, users must look to the notes, and then make their own adjustments to published accounts based on what is, in many ways, incomplete information.
The dollars-and-cents implications are stunning. The Securities and Exchange Commission has estimated the undiscounted value of future lease payments among SEC registrants at more than $1.25 trillion, an amount that is greater than the gross domestic product of many countries. And that figure does not include leases to private entities not filing with the SEC. The rapid global growth of lease financing has made accounting for leases an international issue.
The way forward would seem simple. Both the Chartered Financial Analyst Institute, in its Comprehensive Business Reporting Model, and the SEC, in its report on off-balance-sheet financing, conclude that lease assets and obligations should be on-balance-sheet. Strong support for lease accounting changes is coming from chief financial officers and senior comptrollers. Sphere: Related Content
In March, the working group assembled by the Financial Accounting Standards Board and the International Accounting Standards Board will meet in London for the first time to make a comprehensive review of lease accounting rules.
Because transparency has been seriously compromised under the current rules, Grant Thornton believes that this review is critical and comes not a moment too soon.
The problem is that existing lease accounting rules permit assets (and the related financing liabilities) to be kept off the books, regardless of economic substance, as long as the form of the transaction stays within the bright lines of the rules. Those rules have expanded over the years to include 16 FASB statements and interpretations, 11 technical bulletins and staff positions, and at least 30 Emerging Issues Task Force abstracts. Only specialists can hope to navigate such complexity.
Although there are legitimate tax and legal advantages to lease financing, too many transactions are structured for the purpose of arriving at a desired accounting treatment. The resulting balance sheet does not present a complete and transparent financial picture. Basic analytical tools like return on investment and debt-to-equity ratios are useless when neither the investment nor the debt is on the books. Before conducting even elementary financial statement reviews, users must look to the notes, and then make their own adjustments to published accounts based on what is, in many ways, incomplete information.
The dollars-and-cents implications are stunning. The Securities and Exchange Commission has estimated the undiscounted value of future lease payments among SEC registrants at more than $1.25 trillion, an amount that is greater than the gross domestic product of many countries. And that figure does not include leases to private entities not filing with the SEC. The rapid global growth of lease financing has made accounting for leases an international issue.
The way forward would seem simple. Both the Chartered Financial Analyst Institute, in its Comprehensive Business Reporting Model, and the SEC, in its report on off-balance-sheet financing, conclude that lease assets and obligations should be on-balance-sheet. Strong support for lease accounting changes is coming from chief financial officers and senior comptrollers. Sphere: Related Content
Tuesday, March 20, 2007
Mitchells & Butlers Pressured to Spin-off Of £5.5 Billion Pub Portfolio
The Telegraph - March 19, 2007
Robert Tchenguiz, the property tycoon, has made preparations for a hostile bid for Mitchells & Butlers if the pub chain's chairman, Roger Carr, does not bow to his demands to spin off its £5.5bn property portfolio.
Carr has promised a decision on whether to separate the property into a real estate investment trust (Reit) when the company presents its results in May and Tchenguiz is not expected to move until then.
Last month Tchenguiz increased his personal stake by nearly 3 per cent to 16 per cent and many of his friends and family are thought to have bought in on his coat-tails in the expectation of taking a big profit if he wins the battle to get M&B's property empire spun off.
Legislation providing for Reits - a form of highly tax-efficient property investment trust - came into force at the beginning of the year and since then 14 companies have converted to Reits. However, only property companies have converted so far and any move by Mitchells & Butlers could encourage other non-property businesses to make a similar move.
A source close to Tchenguiz said: "The real interest is to work with the company on any deal. It is an attempt to recreate the deal without private equity - to break up the company into an operating company and a property company and do it in a way where shareholders remain shareholders in the operating company, but get the benefits of the private equity strategy. Sphere: Related Content
Robert Tchenguiz, the property tycoon, has made preparations for a hostile bid for Mitchells & Butlers if the pub chain's chairman, Roger Carr, does not bow to his demands to spin off its £5.5bn property portfolio.
Carr has promised a decision on whether to separate the property into a real estate investment trust (Reit) when the company presents its results in May and Tchenguiz is not expected to move until then.
Last month Tchenguiz increased his personal stake by nearly 3 per cent to 16 per cent and many of his friends and family are thought to have bought in on his coat-tails in the expectation of taking a big profit if he wins the battle to get M&B's property empire spun off.
Legislation providing for Reits - a form of highly tax-efficient property investment trust - came into force at the beginning of the year and since then 14 companies have converted to Reits. However, only property companies have converted so far and any move by Mitchells & Butlers could encourage other non-property businesses to make a similar move.
A source close to Tchenguiz said: "The real interest is to work with the company on any deal. It is an attempt to recreate the deal without private equity - to break up the company into an operating company and a property company and do it in a way where shareholders remain shareholders in the operating company, but get the benefits of the private equity strategy. Sphere: Related Content
EntreCap Sells Portfolio of 18 Net Leased Properties for $364 Million
Comercial Property News -March 19, 2007
With the signing of a definitive agreement with Shelton, Conn.-based EntreCap Financial Corp., New York City's Capital Lease Funding Inc. has committed to purchasing a diverse portfolio of 18 net leased properties. The acquisition cost, including the assumption of existing debt, is $364.4 million.
CapLease is a publicly-traded REIT that targets single-tenant commercial real estate assets that are leased under long-term agreements to high credit quality tenants. Company officials note in a statement that the properties it plans to acquire fit very well with its existing holdings. The company has made $750 million in such acquisitions since its 2004 initial public offering.
CapLease will rely on available cash and a short-term borrowing facility to complete the EntreCap deal, which called for CapLease to pay $5 million into escrow upon entering the agreement, and an additional $15 million into escrow upon the April 7 expiration of the due diligence period. The transaction is on schedule to close early next quarter. Sphere: Related Content
With the signing of a definitive agreement with Shelton, Conn.-based EntreCap Financial Corp., New York City's Capital Lease Funding Inc. has committed to purchasing a diverse portfolio of 18 net leased properties. The acquisition cost, including the assumption of existing debt, is $364.4 million.
CapLease is a publicly-traded REIT that targets single-tenant commercial real estate assets that are leased under long-term agreements to high credit quality tenants. Company officials note in a statement that the properties it plans to acquire fit very well with its existing holdings. The company has made $750 million in such acquisitions since its 2004 initial public offering.
CapLease will rely on available cash and a short-term borrowing facility to complete the EntreCap deal, which called for CapLease to pay $5 million into escrow upon entering the agreement, and an additional $15 million into escrow upon the April 7 expiration of the due diligence period. The transaction is on schedule to close early next quarter. Sphere: Related Content
Monday, March 19, 2007
Myer Seeking Sale Leaseback of Flagship Melbourne Department Store
NEWS.com.au - March 14, 2007
The flagship Myer department store in downtown Melbourne, the largest single department store in the southern hemisphere covering some 72,000 sqm, will be sold by CB Richard Ellis through an expressions of interest campaign that starts immediately.
Under plans announced yesterday, Myer will sell and lease back the Bourke Street component for 20 years with four additional 10-year options, but will cut adrift the Lonsdale Street section by selling it with vacant possession.
Myer currently occupies about 45,000sqm of retail space in the complex, which spreads over two blocks in two linked buildings that cover 15,000sqm of land. But according to a Myer spokesman, a future Myer department store will have between 35,000 and 37,000sqm of floor space.
Myer's redevelopment plans include a $45 million makeover of the ageing Bourke Street store, which was completed almost 75 years ago. Sphere: Related Content
The flagship Myer department store in downtown Melbourne, the largest single department store in the southern hemisphere covering some 72,000 sqm, will be sold by CB Richard Ellis through an expressions of interest campaign that starts immediately.
Under plans announced yesterday, Myer will sell and lease back the Bourke Street component for 20 years with four additional 10-year options, but will cut adrift the Lonsdale Street section by selling it with vacant possession.
Myer currently occupies about 45,000sqm of retail space in the complex, which spreads over two blocks in two linked buildings that cover 15,000sqm of land. But according to a Myer spokesman, a future Myer department store will have between 35,000 and 37,000sqm of floor space.
Myer's redevelopment plans include a $45 million makeover of the ageing Bourke Street store, which was completed almost 75 years ago. Sphere: Related Content
UBS Launches £250 Million Ground Rent Investment Fund
Property Week - March 16, 2007
UBS Global Asset Management this week revealed a pioneering initiative to create a £250m-plus ground rent portfolio.
Instead of chasing small individual ground-rent lots for its flagship open-ended Secure Income Property Fund, UBS has appointed CB Richard Ellis and Colliers CRE to approach owners of large freehold property estates with a view to carving out ground leases that UBS would then use for the fund.
The scheme, which UBS has painted as a viable alternative to the traditional sale-and-leaseback transaction, will enable owner-occupiers to unlock cash from their assets but retain much of the market value of the property by holding on to its long-leasehold interest.
UBS will negotiate the purchase price and the length of the ground lease with the freeholder, which could range between 75 and 999 years. The ground rent will then be subject to five- or seven-yearly reviews rising in line with inflation benchmarks such as the Retail Prices Index.
Richard Tanner, managing director of real estate at UBS, believes the initiative takes active fund management to another level. "Ground rent investments have always appealed to liability-driven investors but the difficulty has always been getting hold of product," he said. "As far as we know we’re the only people to take such a proactive approach and, in theory, it gives us a chance to grow the fund to whatever size we want. "
"The yield differential between the average freehold central London office property and the comparable long-leasehold property is only around 250 basis points. This gives owners the chance to strip out considerable income at a low yield."
The initiative has sparked interest from investors as well as corporate property owners and local authorities. They see the scheme as a chance to access cheap capital, which they can raise from UBS at the same time as acquisition, and therefore gain a competitive edge in the marketplace.
"Some owners have asked us where the catch is, but there isn’t one,’ said Tanner. ‘We are simply interested in securing long-term, stable income that matches the liabilities of the institutional investors in this fund."
"We’re long-term investors. We won’t be packaging up lots to trade at auction and the owner is not liable to pay Stamp Duty in this sort of transaction." Sphere: Related Content
UBS Global Asset Management this week revealed a pioneering initiative to create a £250m-plus ground rent portfolio.
Instead of chasing small individual ground-rent lots for its flagship open-ended Secure Income Property Fund, UBS has appointed CB Richard Ellis and Colliers CRE to approach owners of large freehold property estates with a view to carving out ground leases that UBS would then use for the fund.
The scheme, which UBS has painted as a viable alternative to the traditional sale-and-leaseback transaction, will enable owner-occupiers to unlock cash from their assets but retain much of the market value of the property by holding on to its long-leasehold interest.
UBS will negotiate the purchase price and the length of the ground lease with the freeholder, which could range between 75 and 999 years. The ground rent will then be subject to five- or seven-yearly reviews rising in line with inflation benchmarks such as the Retail Prices Index.
Richard Tanner, managing director of real estate at UBS, believes the initiative takes active fund management to another level. "Ground rent investments have always appealed to liability-driven investors but the difficulty has always been getting hold of product," he said. "As far as we know we’re the only people to take such a proactive approach and, in theory, it gives us a chance to grow the fund to whatever size we want. "
"The yield differential between the average freehold central London office property and the comparable long-leasehold property is only around 250 basis points. This gives owners the chance to strip out considerable income at a low yield."
The initiative has sparked interest from investors as well as corporate property owners and local authorities. They see the scheme as a chance to access cheap capital, which they can raise from UBS at the same time as acquisition, and therefore gain a competitive edge in the marketplace.
"Some owners have asked us where the catch is, but there isn’t one,’ said Tanner. ‘We are simply interested in securing long-term, stable income that matches the liabilities of the institutional investors in this fund."
"We’re long-term investors. We won’t be packaging up lots to trade at auction and the owner is not liable to pay Stamp Duty in this sort of transaction." Sphere: Related Content
Saturday, March 17, 2007
Wm. Morrison Supermarkets Evaluating Options For £7 Billion Property Portfolio
Hemscott - March 15, 2007
William Morrison Supermarkets PLC is considering options for capitalising on its vast property portfolio but is not yet considering a full-scale sale-and-leaseback, chairman Sir Ken Morrison told reporters on a conference call.
William Morrison Supermarkets PLC is considering options for capitalising on its vast property portfolio but is not yet considering a full-scale sale-and-leaseback, chairman Sir Ken Morrison told reporters on a conference call.
As a 'first step' towards extracting value from the estate, which analysts reckon is worth between 7-7.8 bln stg, Morrison has confirmed it is in talks that may lead to it entering into a property partnership for some of its investment properties. Morrison explained that the 25 properties, which could be involved in the partnership, currently being examined are adjoining premises to Morrison's stores that the retailer generates rental income from.
Sir Ken ruled out the prospect of a major property disposal programme in the immediate future. Sphere: Related Content
William Morrison Supermarkets PLC is considering options for capitalising on its vast property portfolio but is not yet considering a full-scale sale-and-leaseback, chairman Sir Ken Morrison told reporters on a conference call.
William Morrison Supermarkets PLC is considering options for capitalising on its vast property portfolio but is not yet considering a full-scale sale-and-leaseback, chairman Sir Ken Morrison told reporters on a conference call.
As a 'first step' towards extracting value from the estate, which analysts reckon is worth between 7-7.8 bln stg, Morrison has confirmed it is in talks that may lead to it entering into a property partnership for some of its investment properties. Morrison explained that the 25 properties, which could be involved in the partnership, currently being examined are adjoining premises to Morrison's stores that the retailer generates rental income from.
Sir Ken ruled out the prospect of a major property disposal programme in the immediate future. Sphere: Related Content
Friday, March 16, 2007
AT&T Enters $29 Million Sale leaseback of Office Building Near Milwaukee
GlobeSt.com - March 14, 2007
Inland has confirmed that a subsidiary it has purchased the AT&T Pewaukee office building for $29 million, in the company’s third sale-leaseback transaction with the telecom provider. Joe Cosenza, president of Inland Real Estate Acquisitions Inc., negotiated the Pewaukee transaction, as well as the $205 million purchase of One AT&T Center in St. Louis at the end of December.
At the Pewaukee building, AT&T Services Inc. will continue to be the sole occupant of the 117,000-sf facility, which is on more than 11 acres. The building houses a call center, a training facility, a sales and marketing center and a real estate department. Cosenza tells GlobeSt.com that the company signed a 25-year lease, but has the option to leave the building after 10 years. The company is paying $12 per sf for rent, he says.
Inland also owns the 1.7 million-sf AT&T Center property in Hoffman Estates, IL, purchased in November 2005 for $338 million. Cosenza also brokered that deal.
AT&T has been closing many sale-leaseback deals as of late, including the sale-leaseback of its headquarters property in Bedminster, NJ to MetLife Inc. for $270 million in December 2006. The telecom company also completed the sale and partial leaseback of Sterling Commerce Plaza, a 308,554-sf office building in Irving, TX with Wells Real Estate Funds.
An AT&T spokesperson describes the sale-leasebacks as part of the company’s ongoing real estate strategy. Sphere: Related Content
Inland has confirmed that a subsidiary it has purchased the AT&T Pewaukee office building for $29 million, in the company’s third sale-leaseback transaction with the telecom provider. Joe Cosenza, president of Inland Real Estate Acquisitions Inc., negotiated the Pewaukee transaction, as well as the $205 million purchase of One AT&T Center in St. Louis at the end of December.
At the Pewaukee building, AT&T Services Inc. will continue to be the sole occupant of the 117,000-sf facility, which is on more than 11 acres. The building houses a call center, a training facility, a sales and marketing center and a real estate department. Cosenza tells GlobeSt.com that the company signed a 25-year lease, but has the option to leave the building after 10 years. The company is paying $12 per sf for rent, he says.
Inland also owns the 1.7 million-sf AT&T Center property in Hoffman Estates, IL, purchased in November 2005 for $338 million. Cosenza also brokered that deal.
AT&T has been closing many sale-leaseback deals as of late, including the sale-leaseback of its headquarters property in Bedminster, NJ to MetLife Inc. for $270 million in December 2006. The telecom company also completed the sale and partial leaseback of Sterling Commerce Plaza, a 308,554-sf office building in Irving, TX with Wells Real Estate Funds.
An AT&T spokesperson describes the sale-leasebacks as part of the company’s ongoing real estate strategy. Sphere: Related Content
Thursday, March 15, 2007
Academy Sports Completes $102 Million Sale Leaseback of HQ in TX
CoStar Group - March 13, 2007
In a sale/leaseback, Academy Sports and Outdoors sold its 1.5 million-square-foot headquarters and distribution center at 1800 N Mason Rd in Katy, Texas to an affiliate of The Cole Cos. for $102 million or approximately $67 per square foot.
Academy leased back the 93-acre property under a 20-year triple-net lease reportedly worth $102 million. Cole funded the acquisition, which was made on the part of its Cole Credit Property Trust II investment fund, using proceeds from its ongoing public offering and $68.3 million loan from Bear Stearns Commercial Mortgage, Inc.
Under its lease, Academy will pay an initial annual base rent of $7,038,000 which increases each year, including during renewal terms, by 1.5% of the then current annual base rent. The initial term of the lease expires January 31, 2027. Academy has eight options to renew the lease, each for an additional five-year term beginning on February 1, 2027.
The Stan Johnson Company of Tulsa, OK represented Academy Sports in the sale/leaseback transaction. Academy is a sporting goods retailer, operating over 80 stores across the southeastern United States. Sphere: Related Content
In a sale/leaseback, Academy Sports and Outdoors sold its 1.5 million-square-foot headquarters and distribution center at 1800 N Mason Rd in Katy, Texas to an affiliate of The Cole Cos. for $102 million or approximately $67 per square foot.
Academy leased back the 93-acre property under a 20-year triple-net lease reportedly worth $102 million. Cole funded the acquisition, which was made on the part of its Cole Credit Property Trust II investment fund, using proceeds from its ongoing public offering and $68.3 million loan from Bear Stearns Commercial Mortgage, Inc.
Under its lease, Academy will pay an initial annual base rent of $7,038,000 which increases each year, including during renewal terms, by 1.5% of the then current annual base rent. The initial term of the lease expires January 31, 2027. Academy has eight options to renew the lease, each for an additional five-year term beginning on February 1, 2027.
The Stan Johnson Company of Tulsa, OK represented Academy Sports in the sale/leaseback transaction. Academy is a sporting goods retailer, operating over 80 stores across the southeastern United States. Sphere: Related Content
JPMorgan Enters Sale and Partial Leaseback of Detroit Tower
CoStar Group - March 14, 2007
Saying it "makes more sense" to be a tenant rather than a building owner, JPMorgan Chase has sent another of its big-city namesake towers into the hands of investors.
The financial services firm announced a deal Tuesday to sell and lease back the Chase Tower in downtown Detroit, continuing a string of recent sale-leasebacks throughout the Midwest.
Locally based Sterling Group is buying the 14-story, nearly 600,000-square-foot building for an undisclosed sum. JPMorgan signed a 10-year lease with renewal options for eight floors totaling almost 215,000 square feet.
"It makes more sense to be a long-term tenant rather than owning the building," said Dick Wade, president of Chase in Michigan.
Sterling Group will lease the remainder of the building. The firm owns and manages several other downtown Detroit buildings, including the 43-story, castle-like Guardian Building, one of the city's most recognizable high-rises.
Chase Tower was constructed in 1959 as headquarters for the National Bank of Detroit, Chase's predecessor. The buidling occupies a prominent location at 611 Woodward Ave. in the city's business district.
Last October, JPMorgan closed a deal that sent 33 properties to a fund managed by Toronto-based Brookfield Asset Management for about $460 million. The 5.3 million-square-foot portfolio spanned 10 cities, mostly in the Midwest, and featured several trophy-class building, including 300 S. Riverside Plaza in Chicago and namesake high-rises in downtown Phoenix and Milwaukee. JPMorgan leased back significant portions of space as part of that deal.
Last month, Brookfield flipped two former JPMorgan assets -- the 750,000-square-foot Chase Tower in Phoenix and the 412,500-square-foot North American Technology Center in Houston -- to Crystal River Capital, a specialty finance company externally managed and advised by a wholly owned subsidiary of Brookfield Asset Management, for about $234 million.
JPMorgan anchors both those buildings under 15-year, triple net leases originally signed with Brookfield. Sphere: Related Content
Saying it "makes more sense" to be a tenant rather than a building owner, JPMorgan Chase has sent another of its big-city namesake towers into the hands of investors.
The financial services firm announced a deal Tuesday to sell and lease back the Chase Tower in downtown Detroit, continuing a string of recent sale-leasebacks throughout the Midwest.
Locally based Sterling Group is buying the 14-story, nearly 600,000-square-foot building for an undisclosed sum. JPMorgan signed a 10-year lease with renewal options for eight floors totaling almost 215,000 square feet.
"It makes more sense to be a long-term tenant rather than owning the building," said Dick Wade, president of Chase in Michigan.
Sterling Group will lease the remainder of the building. The firm owns and manages several other downtown Detroit buildings, including the 43-story, castle-like Guardian Building, one of the city's most recognizable high-rises.
Chase Tower was constructed in 1959 as headquarters for the National Bank of Detroit, Chase's predecessor. The buidling occupies a prominent location at 611 Woodward Ave. in the city's business district.
Last October, JPMorgan closed a deal that sent 33 properties to a fund managed by Toronto-based Brookfield Asset Management for about $460 million. The 5.3 million-square-foot portfolio spanned 10 cities, mostly in the Midwest, and featured several trophy-class building, including 300 S. Riverside Plaza in Chicago and namesake high-rises in downtown Phoenix and Milwaukee. JPMorgan leased back significant portions of space as part of that deal.
Last month, Brookfield flipped two former JPMorgan assets -- the 750,000-square-foot Chase Tower in Phoenix and the 412,500-square-foot North American Technology Center in Houston -- to Crystal River Capital, a specialty finance company externally managed and advised by a wholly owned subsidiary of Brookfield Asset Management, for about $234 million.
JPMorgan anchors both those buildings under 15-year, triple net leases originally signed with Brookfield. Sphere: Related Content
Spirit Finance Corporation Enters $3.5 Billion Merger Agreement
Spirit Finance Corp Web Site - March 13, 2007
Spirit Finance Corporation (NYSE: SFC), a real estate investment trust focused on single tenant, operationally essential real estate, today announced that it has entered into a definitive merger agreement under which a consortium including Macquarie Bank Limited, Kaupthing Bank hf. and other independent equity participants (collectively, 'the Consortium') will acquire Spirit Finance in a transaction valued at approximately $3.5 billion, including approximately $1.9 billion of assumed debt.
Under the terms of the agreement, the Consortium will acquire all of the outstanding shares of Spirit Finance common stock for $14.50 per share in cash. This represents a premium of approximately 15% over Spirit Finance's 90 day average closing share price and an 11% premium over Spirit Finance's closing price on March 12, 2007.
The transaction is expected to close promptly following the satisfaction of all closing conditions, which is anticipated to occur by the end of the third quarter of 2007. Under the merger agreement, Spirit Finance may solicit superior proposals from third parties through April 9, 2007. The Board of Directors of Spirit Finance, with the assistance of its financial advisors, intends to solicit superior proposals during this period.
The Consortium's debt financing in relation to the transaction is being provided by Credit Suisse. Sphere: Related Content
Spirit Finance Corporation (NYSE: SFC), a real estate investment trust focused on single tenant, operationally essential real estate, today announced that it has entered into a definitive merger agreement under which a consortium including Macquarie Bank Limited, Kaupthing Bank hf. and other independent equity participants (collectively, 'the Consortium') will acquire Spirit Finance in a transaction valued at approximately $3.5 billion, including approximately $1.9 billion of assumed debt.
Under the terms of the agreement, the Consortium will acquire all of the outstanding shares of Spirit Finance common stock for $14.50 per share in cash. This represents a premium of approximately 15% over Spirit Finance's 90 day average closing share price and an 11% premium over Spirit Finance's closing price on March 12, 2007.
The transaction is expected to close promptly following the satisfaction of all closing conditions, which is anticipated to occur by the end of the third quarter of 2007. Under the merger agreement, Spirit Finance may solicit superior proposals from third parties through April 9, 2007. The Board of Directors of Spirit Finance, with the assistance of its financial advisors, intends to solicit superior proposals during this period.
The Consortium's debt financing in relation to the transaction is being provided by Credit Suisse. Sphere: Related Content
US Govt Enters $270 Million Build-to-Suit of Military Housing in Germany
Stars & Stripes - March 13, 2007
German officials have given the go-ahead for a 300-unit, build-to-lease off-post housing area for U.S. soldiers in Grafenwöhr, Germany. Grafenwöhr mayor Helmuth Wächter said this month that government officials recently gave the green light to the project in Hütten, a small farming village a few miles south of Grafenwöhr Training Area.
Officials estimate about 1,600 off-post homes must be built to accommodate thousands of soldiers and family members due to arrive here over the next few years. The houses will be constructed under a build-to-lease program that will see the Army lease back the completed homes. The total cost of leasing all 1,600 homes to be built around Grafenwöhr will be $20 million annually, officials have said.
Officials have selected a private investor who work with the city in the Hütten on the Lake venture, Wächter said. He said it is too early to identify the investor. Wächter added that the housing project involves building new streets and utilities on bare farmland.
Hütten on the Lake will cost an estimated 200 million euros – about $270 million — to build, he said. Sphere: Related Content
German officials have given the go-ahead for a 300-unit, build-to-lease off-post housing area for U.S. soldiers in Grafenwöhr, Germany. Grafenwöhr mayor Helmuth Wächter said this month that government officials recently gave the green light to the project in Hütten, a small farming village a few miles south of Grafenwöhr Training Area.
Officials estimate about 1,600 off-post homes must be built to accommodate thousands of soldiers and family members due to arrive here over the next few years. The houses will be constructed under a build-to-lease program that will see the Army lease back the completed homes. The total cost of leasing all 1,600 homes to be built around Grafenwöhr will be $20 million annually, officials have said.
Officials have selected a private investor who work with the city in the Hütten on the Lake venture, Wächter said. He said it is too early to identify the investor. Wächter added that the housing project involves building new streets and utilities on bare farmland.
Hütten on the Lake will cost an estimated 200 million euros – about $270 million — to build, he said. Sphere: Related Content
Wednesday, March 14, 2007
Vue Entertainment Completes £71.1 Million Sale Leaseback of Six UK Cinemas
LawFuel - March 12, 2007
Anita Weightman, Vanessa Rickard, Claire Quinn, Stephen Jones and Susan Fink of DLA Piper have acted for Vue Entertainment on the £71.1 million sale and leaseback of a portfolio of six cinemas to Cheval Properties.
The portfolio composes five prime investment properties located in Cambridge, Doncaster, York, Accrington and the flagship Leicester Square cinema in London. The properties include a mix of freehold and leasehold interests.
There is also a redevelopment opportunity located in Bury adjacent to an ASDA Superstore. Vue has entered into a new 15-year lease on four of the investment properties, a 29-year lease on Leicester Square and a 3-year lease in Bury.
Vue is the largest operator of modern, stadia seated multiplex cinemas in the UK. It has 55 multiplex cinemas with 544 state-of-the-art auditoria. Sphere: Related Content
Anita Weightman, Vanessa Rickard, Claire Quinn, Stephen Jones and Susan Fink of DLA Piper have acted for Vue Entertainment on the £71.1 million sale and leaseback of a portfolio of six cinemas to Cheval Properties.
The portfolio composes five prime investment properties located in Cambridge, Doncaster, York, Accrington and the flagship Leicester Square cinema in London. The properties include a mix of freehold and leasehold interests.
There is also a redevelopment opportunity located in Bury adjacent to an ASDA Superstore. Vue has entered into a new 15-year lease on four of the investment properties, a 29-year lease on Leicester Square and a 3-year lease in Bury.
Vue is the largest operator of modern, stadia seated multiplex cinemas in the UK. It has 55 multiplex cinemas with 544 state-of-the-art auditoria. Sphere: Related Content
Fireman's Fund HQ in Novato, CA Sold for $310 Million
CoStar Group - March 12, 2007
American Financial Realty Trust (NYSE: AFR) is selling the Fireman's Fund Insurance Co. headquarters in Novato, CA to an undisclosed buyer for more than $310 million, or $436 a square foot.
The sale of the 710,330-square-foot, three-building property in the Marin County city north of San Francisco is expected to close in the second quarter. Jenkintown, PA-based AFR would only describe the buyer as a California-based private real estate investment group partnering with an institutional real estate investor.
First State Investors LLC, an AFR subsidiary, bought the 65-acre office complex from San Marin Assurance Co. in August 2005 for $283.5 million, or just under $400 a square foot. The building sold at a cap rate of 7.82% based on projected lease income from Fireman's Fund, which agreed to continue to lease the property on a net lease basis through November 2018. Susan Murdy, director of media relations for the national insurer, told CoStar that said the company’s headquarters would remain in Novato.
Fireman's Fund is one of the largest tenants in Marin County's modest office market, which amounts to about 7.5 million square feet.
Eastdil Secured is representing American Financial in the sale. Sphere: Related Content
American Financial Realty Trust (NYSE: AFR) is selling the Fireman's Fund Insurance Co. headquarters in Novato, CA to an undisclosed buyer for more than $310 million, or $436 a square foot.
The sale of the 710,330-square-foot, three-building property in the Marin County city north of San Francisco is expected to close in the second quarter. Jenkintown, PA-based AFR would only describe the buyer as a California-based private real estate investment group partnering with an institutional real estate investor.
First State Investors LLC, an AFR subsidiary, bought the 65-acre office complex from San Marin Assurance Co. in August 2005 for $283.5 million, or just under $400 a square foot. The building sold at a cap rate of 7.82% based on projected lease income from Fireman's Fund, which agreed to continue to lease the property on a net lease basis through November 2018. Susan Murdy, director of media relations for the national insurer, told CoStar that said the company’s headquarters would remain in Novato.
Fireman's Fund is one of the largest tenants in Marin County's modest office market, which amounts to about 7.5 million square feet.
Eastdil Secured is representing American Financial in the sale. Sphere: Related Content
Sunday, March 11, 2007
Sun Weighs $150 Million Sale Leaseback of Burlington MA Office Campus
Boston Herald - March 10, 2007
Sun Microsystems is exploring a sale of its116-acre Burlington campus, a move that comes as the once-hot tech giant slashes jobs and scales back its local ambitions, real estate executives said.
Santa Clara, Calif.-based Sun is weighing plans to sell the campus - a key research center which includes 700,000 square feet of office buildings - to an investor. It would then lease it back, enabling the company to cash in on a lucrative asset while relinquishing control over the real estate itself.
Sun could reap as much as $150 million from the so-called sale-leaseback, according to one real estate executive examining the deal. The site also includes untapped development sites that Sun is now not likely to use, executives said.
Sun’s real estate move comes as the company retrenches. It announced plans to cut 5,000 jobs last year. Sun made a big splash along tech-heavy Route 128 in the late 1990s, rolling out plans for a major corporate campus off Route 128 in Burlington with talk of someday employing 4,000 there. But today the number of Sun employees at its Burlington campus is roughly half that, with plans for new buildings mothballed. Sphere: Related Content
Sun Microsystems is exploring a sale of its116-acre Burlington campus, a move that comes as the once-hot tech giant slashes jobs and scales back its local ambitions, real estate executives said.
Santa Clara, Calif.-based Sun is weighing plans to sell the campus - a key research center which includes 700,000 square feet of office buildings - to an investor. It would then lease it back, enabling the company to cash in on a lucrative asset while relinquishing control over the real estate itself.
Sun could reap as much as $150 million from the so-called sale-leaseback, according to one real estate executive examining the deal. The site also includes untapped development sites that Sun is now not likely to use, executives said.
Sun’s real estate move comes as the company retrenches. It announced plans to cut 5,000 jobs last year. Sun made a big splash along tech-heavy Route 128 in the late 1990s, rolling out plans for a major corporate campus off Route 128 in Burlington with talk of someday employing 4,000 there. But today the number of Sun employees at its Burlington campus is roughly half that, with plans for new buildings mothballed. Sphere: Related Content
Bouygues Telecom Enters EUR 260 Million Build-to-Suit for Paris HQ
Property Magazine International - March 9, 2007
Having signed the deed for the Technôpole Bouygues Telecom project development just days ago, Commerz Grundbesitz (CGG) will invest more than 260 million euros in the property.
The building, which has a lettable area of 53,000 m² and 2,000 parking spaces, was sold by Bouygues Immobilier. The future tenant, Bouygues Telecom, is also part of the Bouygues Group and the third largest telco company in France.
The company signed a fixed lease over 9 years and will set up its corporate seat here as the building’s single tenant. On the seller side, the transaction was masterminded by Jones Lang LaSalle Paris.
Following its completion in late 2009, the office building will be added to the hausInvest europa portfolio. Sphere: Related Content
Having signed the deed for the Technôpole Bouygues Telecom project development just days ago, Commerz Grundbesitz (CGG) will invest more than 260 million euros in the property.
The building, which has a lettable area of 53,000 m² and 2,000 parking spaces, was sold by Bouygues Immobilier. The future tenant, Bouygues Telecom, is also part of the Bouygues Group and the third largest telco company in France.
The company signed a fixed lease over 9 years and will set up its corporate seat here as the building’s single tenant. On the seller side, the transaction was masterminded by Jones Lang LaSalle Paris.
Following its completion in late 2009, the office building will be added to the hausInvest europa portfolio. Sphere: Related Content
Saturday, March 10, 2007
Royal Mail Completes £70 Million Sale Leaseback of 285 UK Properties
Land Securities Group Web Site - March 8, 2007
Land Securities Group PLC announces that its property partnership business Land Securities Trillium (‘LST’) has completed the acquisition of a portfolio of 285 properties from the Royal Mail, for around £70 million.
Of the portfolio, a total of 108 leasehold properties are vacant and surplus to Royal Mail’s operations, the responsibility for which will now pass to Land Securities Trillium. These vacant properties will be refurbished by LST with a view to securing new occupiers. The remaining 177 freehold properties, where only part of the space is being used by Royal Mail for operational purposes, will be leased back by LST to Royal Mail for 15 years. Royal Mail will occupy just the space it needs within these buildings. It is expected that the contract will become earnings enhancing for LST from the second year of ownership onwards.
This transaction reportedly represents just 3% of the total operating space for Royal Mail. Sphere: Related Content
Land Securities Group PLC announces that its property partnership business Land Securities Trillium (‘LST’) has completed the acquisition of a portfolio of 285 properties from the Royal Mail, for around £70 million.
Of the portfolio, a total of 108 leasehold properties are vacant and surplus to Royal Mail’s operations, the responsibility for which will now pass to Land Securities Trillium. These vacant properties will be refurbished by LST with a view to securing new occupiers. The remaining 177 freehold properties, where only part of the space is being used by Royal Mail for operational purposes, will be leased back by LST to Royal Mail for 15 years. Royal Mail will occupy just the space it needs within these buildings. It is expected that the contract will become earnings enhancing for LST from the second year of ownership onwards.
This transaction reportedly represents just 3% of the total operating space for Royal Mail. Sphere: Related Content
Cable & Wireless Pursuing £86 Million Sale Leaseback of Eight UK Properties
Property Week reports that Cable & Wireless has retained Doherty Baines to carry out an £86 million sale and leaseback of eight office and technical properties totaling 350,000 sq ft (32,515 sq m) in the UK.
Sphere: Related Content
ShopKo Agrees to $75.5 Million Sale Leaseback Seven Stores in Western US
The Business Journal of Milwaukee - March 8, 2007
The operator of ShopKo discount department stores has agreed to sell and lease back seven store properties in the western United States under a transaction that will provide cash for new stores and remodeling of existing locations.
ShopKo Stores Operating Co. L.L.C. sold its ownership interest in the properties to Princeton, N.J., private equity investor Sovereign Investment Co. and its partner Atlas Investments for $75.5 million, the buyers said late Wednesday. The stores are in Salem, Bend and Eugene, Ore.; Boise, Idaho; Sandy City and Orem, Utah; and Lacey, Wash. ShopKo will lease the stores back for 20 years.
Proceeds from the transaction are expected to help strengthen ShopKo's financial position and allow management to focus on remodeling stores and growing the store base, Sovereign said.
In mid-2006, ShopKo sold 112 ShopKo store properties, 66 Pamida store properties, three distribution centers, ShopKo's corporate headquarters in Ashwaubenon and the Pamida headquarters in Omaha, Neb., to Spirit Finance Corp., a real estate investment trust based in Scottsdale, Ariz., for $815.3 million. Proceeds of that deal were to be used to retire a $700 million real estate debt and pay down a portion of a revolving credit facility.
ShopKo Stores Operating Co. is a company formed from the reorganization of SKO Group Holding Corp., a company created by private equity firm Sun Capital Partners Inc., of Boca Raton, Fla., in association with Sun's acquisition of the formerly publicly traded ShopKo Stores Inc. in December 2005. Sphere: Related Content
The operator of ShopKo discount department stores has agreed to sell and lease back seven store properties in the western United States under a transaction that will provide cash for new stores and remodeling of existing locations.
ShopKo Stores Operating Co. L.L.C. sold its ownership interest in the properties to Princeton, N.J., private equity investor Sovereign Investment Co. and its partner Atlas Investments for $75.5 million, the buyers said late Wednesday. The stores are in Salem, Bend and Eugene, Ore.; Boise, Idaho; Sandy City and Orem, Utah; and Lacey, Wash. ShopKo will lease the stores back for 20 years.
Proceeds from the transaction are expected to help strengthen ShopKo's financial position and allow management to focus on remodeling stores and growing the store base, Sovereign said.
In mid-2006, ShopKo sold 112 ShopKo store properties, 66 Pamida store properties, three distribution centers, ShopKo's corporate headquarters in Ashwaubenon and the Pamida headquarters in Omaha, Neb., to Spirit Finance Corp., a real estate investment trust based in Scottsdale, Ariz., for $815.3 million. Proceeds of that deal were to be used to retire a $700 million real estate debt and pay down a portion of a revolving credit facility.
ShopKo Stores Operating Co. is a company formed from the reorganization of SKO Group Holding Corp., a company created by private equity firm Sun Capital Partners Inc., of Boca Raton, Fla., in association with Sun's acquisition of the formerly publicly traded ShopKo Stores Inc. in December 2005. Sphere: Related Content
Thursday, March 08, 2007
Accor Enters EUR 863 Million Sale Leaseback of 91 Hotels in Germany & Netherlands
Hotel & Motel Management - March 5, 2007
As part of its real estate management strategy, Accor said today that it has signed a memorandum of understanding to sell 72 hotels in Germany and 19 in the Netherlands to Moor Park Real Estate for 863 million euros, including a 43-million-euro renovation program to be paid for by the owner. The Novotel, Mercure, Ibis and Etap Hotel properties involved in the transaction represent a total of 12,000 rooms.
Accor will continue to operate the hotels under 12-year variable-rent leases, whose rents are based on an average 18% of annual revenues with no guaranteed minimum. The leases are renewable six times, for a total of 84 years. Based on 2006 revenues, variable rent would have amounted to 49.5 million euros (5.74% cap rate.) Insurance costs, property taxes and structural maintenance capex (1.8 million euros in 2006) will be at the owner’s expense.
Accor is now pursuing its innovative real estate management strategy designed to reduce earnings volatility and can focus on its core business, hotels operations. Germany and the Netherlands now follow France, Belgium and the United Kingdom. The transaction enables Accor to join forces with a company that is already established in the German real estate market, owner of more than 70 Praktiker shops and with asset management teams.
As part of the agreement signed today, a long-term development partnership will be launched, enabling Accor to step up its expansion program in Germany and the Netherlands. Financially, the transaction will enable Accor to reduce its adjusted net debt by 612 million euros, of which 215 million euros will be added to the Group's cash reserves. It will have no impact on EBITDA, will add 5 million euros to 2007 profit before tax and 10 million euros on a full year base.
Accor's financial advisors on the transaction were BNP Paribas, with legal and tax advice by CMS Hasche Sigle and Stibbe. Sphere: Related Content
As part of its real estate management strategy, Accor said today that it has signed a memorandum of understanding to sell 72 hotels in Germany and 19 in the Netherlands to Moor Park Real Estate for 863 million euros, including a 43-million-euro renovation program to be paid for by the owner. The Novotel, Mercure, Ibis and Etap Hotel properties involved in the transaction represent a total of 12,000 rooms.
Accor will continue to operate the hotels under 12-year variable-rent leases, whose rents are based on an average 18% of annual revenues with no guaranteed minimum. The leases are renewable six times, for a total of 84 years. Based on 2006 revenues, variable rent would have amounted to 49.5 million euros (5.74% cap rate.) Insurance costs, property taxes and structural maintenance capex (1.8 million euros in 2006) will be at the owner’s expense.
Accor is now pursuing its innovative real estate management strategy designed to reduce earnings volatility and can focus on its core business, hotels operations. Germany and the Netherlands now follow France, Belgium and the United Kingdom. The transaction enables Accor to join forces with a company that is already established in the German real estate market, owner of more than 70 Praktiker shops and with asset management teams.
As part of the agreement signed today, a long-term development partnership will be launched, enabling Accor to step up its expansion program in Germany and the Netherlands. Financially, the transaction will enable Accor to reduce its adjusted net debt by 612 million euros, of which 215 million euros will be added to the Group's cash reserves. It will have no impact on EBITDA, will add 5 million euros to 2007 profit before tax and 10 million euros on a full year base.
Accor's financial advisors on the transaction were BNP Paribas, with legal and tax advice by CMS Hasche Sigle and Stibbe. Sphere: Related Content
Nordic Cold Storage Completes $83.3 Million Sale Leaseback of Three Warehouses in Atlanta
CoStar Group - March 6, 2007
W.P. Carey & Co., a New York-based investment firm, acquired three cold storage facilities in Georgia from Nordic Cold Storage LLC for $83.3 million, or about $65 per square foot. Nordic Cold Storage is leasing back each facility under long-term, triple net agreements.
The 1.3 million-square-foot portfolio includes 3485 Empire Blvd. in Atlanta, 4300 Pleasantdale Road in Doraville and 1802 Rome Highway in Rockmart. The Empire Blvd. facility is about 152,500 square feet and the Pleasantdale facility is about 301,800 square feet, while the Rome Highway property totals 850,000 square feet.
"We are attracted to the growth trends in this sector," said Jason Fox, a director with W.P. Carey. "There is increasing demand for well-located cold storage sites with easy access to highways and truck routes, sites that are currently at a premium. Nordic’s three metro-Atlanta locations are benefiting from this demand and operating at capacity."
Both the buyer and seller were self-represented. Nordic said it will reinvest proceeds from the sale to improve operations. Sphere: Related Content
W.P. Carey & Co., a New York-based investment firm, acquired three cold storage facilities in Georgia from Nordic Cold Storage LLC for $83.3 million, or about $65 per square foot. Nordic Cold Storage is leasing back each facility under long-term, triple net agreements.
The 1.3 million-square-foot portfolio includes 3485 Empire Blvd. in Atlanta, 4300 Pleasantdale Road in Doraville and 1802 Rome Highway in Rockmart. The Empire Blvd. facility is about 152,500 square feet and the Pleasantdale facility is about 301,800 square feet, while the Rome Highway property totals 850,000 square feet.
"We are attracted to the growth trends in this sector," said Jason Fox, a director with W.P. Carey. "There is increasing demand for well-located cold storage sites with easy access to highways and truck routes, sites that are currently at a premium. Nordic’s three metro-Atlanta locations are benefiting from this demand and operating at capacity."
Both the buyer and seller were self-represented. Nordic said it will reinvest proceeds from the sale to improve operations. Sphere: Related Content
Sunday, March 04, 2007
YIT Agrees to EUR 69 Million Sale Leaseback of Helsinki HQ
YIT Web Site - March 2, 2007
Finnish construction group YIT has decided to expand its head office in Käpylä, Helsinki, and agreed on the sale of the extension to RBS Nordisk Renting for EUR 69 million. Furthermore, Ilmarinen Mutual Pension Insurance Company will sell the office premises used by YIT in Käpylä to RBS Nordisk Renting.
YIT will develop and build the extension. Upon the completion of the project, YIT will move into the premises under a 15-year lease. The extension will measure about 15,000 m2. Construction will begin in March 2007 and the new office building is slated for completion by the end of 2008. The extension will have workspace for a total of about 600 people.
At the same time, the existing commercial premises on the property will be extended and modernized, and a four-storey parking lot will be built mainly underground for the property. Sphere: Related Content
Finnish construction group YIT has decided to expand its head office in Käpylä, Helsinki, and agreed on the sale of the extension to RBS Nordisk Renting for EUR 69 million. Furthermore, Ilmarinen Mutual Pension Insurance Company will sell the office premises used by YIT in Käpylä to RBS Nordisk Renting.
YIT will develop and build the extension. Upon the completion of the project, YIT will move into the premises under a 15-year lease. The extension will measure about 15,000 m2. Construction will begin in March 2007 and the new office building is slated for completion by the end of 2008. The extension will have workspace for a total of about 600 people.
At the same time, the existing commercial premises on the property will be extended and modernized, and a four-storey parking lot will be built mainly underground for the property. Sphere: Related Content
Saturday, March 03, 2007
Shell Oil HQ in in Helsinki Sold
Europe Real Estate - March 1, 2007
Aareal Nordic Fund, managed by Aareal Immobilien Kapitalanlagegesellschaft mbH, which is a 100% subsidiary of Aareal Asset Management GmbH, announces that it has purchased its fifth property in Finland, bringing its portfolio in the country close to the €100 million. The 10,000 m² office building is leased to Shell Oil and serves as their headquarters in Finland. Sphere: Related Content
Aareal Nordic Fund, managed by Aareal Immobilien Kapitalanlagegesellschaft mbH, which is a 100% subsidiary of Aareal Asset Management GmbH, announces that it has purchased its fifth property in Finland, bringing its portfolio in the country close to the €100 million. The 10,000 m² office building is leased to Shell Oil and serves as their headquarters in Finland. Sphere: Related Content
Thursday, March 01, 2007
Health Net Enters $90 Million Sale Leaseback of Northeastern HQ in CT
CoStar Group - February 26, 2007
Following a trend of pricey sale-leasebacks among corporate real estate owners, Health Net Inc. is selling its 68-acre Northeastern headquarters campus to The Dacourt Group in a $90 million deal.
The Woodland Hills, CA-based healthcare coverage provider signed a 10-year leaseback for its three-building, 327,000-square-foot office complex, located at 1 Far Mill Crossing in Shelton, CT. The deal is expected to close by the end of the first quarter.
"Freeing up this capital provides us with even greater financial flexibility going forward," said Jay Gellert, president and CEO of Health Net.
A slew of corporations have recently jumped onto the sale-leaseback wagon, including Sun Microsystems, IBM, JPMorgan Chase, Volkswagen and Merrill Lynch, which is currently in negotiations to sell and leaseback its Princeton, NJ-area campus. Corporate owners are increasingly looking to cash out their real estate assets in a hot market, and reinvest capital into other core operations. Sphere: Related Content
Following a trend of pricey sale-leasebacks among corporate real estate owners, Health Net Inc. is selling its 68-acre Northeastern headquarters campus to The Dacourt Group in a $90 million deal.
The Woodland Hills, CA-based healthcare coverage provider signed a 10-year leaseback for its three-building, 327,000-square-foot office complex, located at 1 Far Mill Crossing in Shelton, CT. The deal is expected to close by the end of the first quarter.
"Freeing up this capital provides us with even greater financial flexibility going forward," said Jay Gellert, president and CEO of Health Net.
A slew of corporations have recently jumped onto the sale-leaseback wagon, including Sun Microsystems, IBM, JPMorgan Chase, Volkswagen and Merrill Lynch, which is currently in negotiations to sell and leaseback its Princeton, NJ-area campus. Corporate owners are increasingly looking to cash out their real estate assets in a hot market, and reinvest capital into other core operations. Sphere: Related Content
National Grid Completes $61 Million Sale Leaseback of UK HQ
Property Executive - February 26, 2007
PRUPIM has purchased the freehold interest in National Grid House, Warwick Technology Park, Warwick for £61 million on behalf of one of its client funds.
The property comprises 244,192 sq ft of office accommodation, conference and meeting facilities, a health and fitness centre and a restaurant in six interlinked buildings. The net initial yield was 5.45%. The property was purchased on a sale and leaseback agreement, let to National Grid Electricity Transmission plc on a 20-year lease with a tenant's option to break at year 15.
Steffan Francis, PRUPIM's Head of Institutional Funds commented: 'We are very pleased to have secured a flagship headquarters office building with a long, well secured income. We expect to invest substantial sums this year in similar well let investments across the sectors.'
Savills acted for PRUPIM and GVA Grimley acted for National Grid. Sphere: Related Content
PRUPIM has purchased the freehold interest in National Grid House, Warwick Technology Park, Warwick for £61 million on behalf of one of its client funds.
The property comprises 244,192 sq ft of office accommodation, conference and meeting facilities, a health and fitness centre and a restaurant in six interlinked buildings. The net initial yield was 5.45%. The property was purchased on a sale and leaseback agreement, let to National Grid Electricity Transmission plc on a 20-year lease with a tenant's option to break at year 15.
Steffan Francis, PRUPIM's Head of Institutional Funds commented: 'We are very pleased to have secured a flagship headquarters office building with a long, well secured income. We expect to invest substantial sums this year in similar well let investments across the sectors.'
Savills acted for PRUPIM and GVA Grimley acted for National Grid. Sphere: Related Content
JP Morgan Chase Offices in Houston & Phoenix Sold for 234 Million
CoStar Group - February 28, 2007
Brookfield Asset Management (NYSE: BAM) is selling two fully leased office buildings in Houston and Phoenix to Crystal River Capital (NYSE:CRZ) in a deal valued at about $234 million. Crystal River is a specialty finance company externally managed and advised by a wholly-owned subsidiary of Brookfield Asset Management.
The 1.2 million-square-foot transaction includes the 750,000-square-foot Chase Tower -- Arizona's tallest building -- at 201 N. Central Ave. in downtown Phoenix, and the 412,500-square-foot North American Technology Center at 1111 Fannin St. in downtown Houston. JP Morgan Chase anchors both buildings under 15-year, triple net leases.
Toronto-based Brookfield, which teamed with The Blackstone Group to acquire Trizec Properties and Trizec Canada last year for $8.9 billion, acquired the two buildings last fall on behalf of Brookfield Real Estate Opportunity Fund in a 33-property, $460 million portfolio acquisition from JPMorgan Chase. That deal also included Chicago's landmark 300 S. Riverside Plaza office building and Milwaukee's 472,500-square-foot Chase Tower. Sphere: Related Content
Brookfield Asset Management (NYSE: BAM) is selling two fully leased office buildings in Houston and Phoenix to Crystal River Capital (NYSE:CRZ) in a deal valued at about $234 million. Crystal River is a specialty finance company externally managed and advised by a wholly-owned subsidiary of Brookfield Asset Management.
The 1.2 million-square-foot transaction includes the 750,000-square-foot Chase Tower -- Arizona's tallest building -- at 201 N. Central Ave. in downtown Phoenix, and the 412,500-square-foot North American Technology Center at 1111 Fannin St. in downtown Houston. JP Morgan Chase anchors both buildings under 15-year, triple net leases.
Toronto-based Brookfield, which teamed with The Blackstone Group to acquire Trizec Properties and Trizec Canada last year for $8.9 billion, acquired the two buildings last fall on behalf of Brookfield Real Estate Opportunity Fund in a 33-property, $460 million portfolio acquisition from JPMorgan Chase. That deal also included Chicago's landmark 300 S. Riverside Plaza office building and Milwaukee's 472,500-square-foot Chase Tower. Sphere: Related Content
Sunday, February 25, 2007
Assystem HQ in France Sold for EUR 40 Million
Europe Real Estate - February 23, 2007
For its DEGI INTERNATIONAL fund, the real estate investment manager DEGI Deutsche Gesellschaft für Immobilienfonds mbH is investing around €40 million in an office project in Saint Quentin en Yvelines within the metropolitan region of Île-de-France.
In a sale-and-lease-back procedure, DEGI is acquiring the project development package, fully let in advance, from the subsequent user Assystem, a leading international group in the field of engineering and innovation consultancy.
The L-shaped building, with a total area of 11,088 m², is accessed by two core areas, and features five floors above ground plus a two-story underground car park and a restaurant for employees. Divisible stories would enable the property also to be let in small sections. Completion of the office building is scheduled for the third quarter of 2008.
The location is conveniently situated for transport access: 200 metres away is a station connecting to the suburban railway network (RER) of the Paris metropolitan region. The slip-roads to the A12 and A13 motorways are about one kilometre away. Sphere: Related Content
For its DEGI INTERNATIONAL fund, the real estate investment manager DEGI Deutsche Gesellschaft für Immobilienfonds mbH is investing around €40 million in an office project in Saint Quentin en Yvelines within the metropolitan region of Île-de-France.
In a sale-and-lease-back procedure, DEGI is acquiring the project development package, fully let in advance, from the subsequent user Assystem, a leading international group in the field of engineering and innovation consultancy.
The L-shaped building, with a total area of 11,088 m², is accessed by two core areas, and features five floors above ground plus a two-story underground car park and a restaurant for employees. Divisible stories would enable the property also to be let in small sections. Completion of the office building is scheduled for the third quarter of 2008.
The location is conveniently situated for transport access: 200 metres away is a station connecting to the suburban railway network (RER) of the Paris metropolitan region. The slip-roads to the A12 and A13 motorways are about one kilometre away. Sphere: Related Content
Saturday, February 24, 2007
Wyndham Worldwide Signs 15 Year Lease For New HQ Office Building
NJBIZ.com - February 22, 2007
Mack-Cali Realty (NYSE: CLI) in Edison today said it was selected by Wyndham Worldwide (NYSE: WYN) to develop the hospitality company’s new corporate headquarters. The three-story, 250,000-square-foot office building will be built on Sylvan Way at the Mack-Cali Business Campus in Parsippany.
Wyndham has already signed a 15-year lease on the building, according to Mack-Cali. Parsippany-based Wyndham currently occupies 1 Sylvan Way, 7 Sylvan Way and 10 Sylvan Way at the campus. It will continue to occupy space at 7 Sylvan Way; however, the other locations have been leased, says Mack-Cali.
Financial terms of the deal were undisclosed. HLW International will serve as lead architect on the project. Sphere: Related Content
Mack-Cali Realty (NYSE: CLI) in Edison today said it was selected by Wyndham Worldwide (NYSE: WYN) to develop the hospitality company’s new corporate headquarters. The three-story, 250,000-square-foot office building will be built on Sylvan Way at the Mack-Cali Business Campus in Parsippany.
Wyndham has already signed a 15-year lease on the building, according to Mack-Cali. Parsippany-based Wyndham currently occupies 1 Sylvan Way, 7 Sylvan Way and 10 Sylvan Way at the campus. It will continue to occupy space at 7 Sylvan Way; however, the other locations have been leased, says Mack-Cali.
Financial terms of the deal were undisclosed. HLW International will serve as lead architect on the project. Sphere: Related Content
EnCana Signs $1.1 Billion Build-to-Suit For Calgary HQ
Business Edge News Magazine - February 23, 2007
EnCana Corp. (TSX:ECA) has turned over its $1-billion-plus Bow office-tower project to H&R Real Estate Investment Trust (TSX:HR.UN) and signed a 25-year lease on all of the landmark 59-storey building. The natural gas and oilsands company said it received $70 million on the sale, and this amount "largely represents EnCana's investment to date."
The lease, described as the largest single-tenant lease in Canadian history, carries an initial rental rate of about $36 per square foot for "state-of-the-art office space in the Calgary market" upon the project's completion, scheduled for 2011.
The sale includes the development plans and contracts for the 1.9-million-sq.-ft. building on the north block between 5th and 7th Avenues between Centre and 1st Streets S.E., which will be the tallest office building in Western Canada, and the 200,000-sq.-ft. development on the south block.
The crescent-shaped north block building is budgeted at $1.1 billion, with construction to begin this summer. The development is intended to consolidate EnCana's current office space spread over five downtown Calgary buildings. Sphere: Related Content
EnCana Corp. (TSX:ECA) has turned over its $1-billion-plus Bow office-tower project to H&R Real Estate Investment Trust (TSX:HR.UN) and signed a 25-year lease on all of the landmark 59-storey building. The natural gas and oilsands company said it received $70 million on the sale, and this amount "largely represents EnCana's investment to date."
The lease, described as the largest single-tenant lease in Canadian history, carries an initial rental rate of about $36 per square foot for "state-of-the-art office space in the Calgary market" upon the project's completion, scheduled for 2011.
The sale includes the development plans and contracts for the 1.9-million-sq.-ft. building on the north block between 5th and 7th Avenues between Centre and 1st Streets S.E., which will be the tallest office building in Western Canada, and the 200,000-sq.-ft. development on the south block.
The crescent-shaped north block building is budgeted at $1.1 billion, with construction to begin this summer. The development is intended to consolidate EnCana's current office space spread over five downtown Calgary buildings. Sphere: Related Content
Iris Hotel Group Completes $300 Million Sale leaseback of Australian Hotel Portfolio
Jones Lang LaSalle Web Site - February 21, 2007
Jones Lang LaSalle Hotels is delighted to announce the sale of the Iris Hotel Group on a sale and leaseback basis to T W Hedley Pty Ltd for approximately $300 million. John Musca, Senior Vice President, Jones Lang LaSalle Hotels, was the exclusive agent who negotiated the transaction.
The portfolio sale included The Cabramatta Inn, Eastwood Hotel, Canterbury Hotel, Revesby Pacific Hotel, Bankstown Club Hotel, Wattlegrove Club Hotel, Mount Annan Club Hotel, Campbelltown Club Hotel and Leumeah Club Hotel. Iris will retain ownership of four other hotels in the Group.
“With over 34,500m2 of land area across the portfolio, the nine hotels also include a number of DA’s for further development and/or box-format retail liquor opportunities,” said Mr Musca.
The Hedley Group acquired the hotels with 45-year leases in place and will retain the ownership of the hotel licenses and 238 gaming machines at the venues. “The sale highlights the continued corporatisation of Australia’s pub investment market and demonstrates the value the financial markets place in the separation of the freehold assets and income streams,” said Mr Musca.
Investment activity in Australia’s pub market continues to maintain its strong momentum. Unprecedented levels of transaction activity and investor interest were reported in both NSW and Queensland during 2006, surpassing sales activity recorded during 2005. Sphere: Related Content
Jones Lang LaSalle Hotels is delighted to announce the sale of the Iris Hotel Group on a sale and leaseback basis to T W Hedley Pty Ltd for approximately $300 million. John Musca, Senior Vice President, Jones Lang LaSalle Hotels, was the exclusive agent who negotiated the transaction.
The portfolio sale included The Cabramatta Inn, Eastwood Hotel, Canterbury Hotel, Revesby Pacific Hotel, Bankstown Club Hotel, Wattlegrove Club Hotel, Mount Annan Club Hotel, Campbelltown Club Hotel and Leumeah Club Hotel. Iris will retain ownership of four other hotels in the Group.
“With over 34,500m2 of land area across the portfolio, the nine hotels also include a number of DA’s for further development and/or box-format retail liquor opportunities,” said Mr Musca.
The Hedley Group acquired the hotels with 45-year leases in place and will retain the ownership of the hotel licenses and 238 gaming machines at the venues. “The sale highlights the continued corporatisation of Australia’s pub investment market and demonstrates the value the financial markets place in the separation of the freehold assets and income streams,” said Mr Musca.
Investment activity in Australia’s pub market continues to maintain its strong momentum. Unprecedented levels of transaction activity and investor interest were reported in both NSW and Queensland during 2006, surpassing sales activity recorded during 2005. Sphere: Related Content
Friday, February 23, 2007
Toll Brothers HQ Near Philadelphia Sold for $44 Million
Philadelphia Business Journal - February 21, 2007:
The office building where Toll Brothers Inc. makes its headquarters has changed hands. Compson Holding Corp. sold the 203,000-square-foot, suburban Philadelphia building to an undisclosed Atlanta-based private investor for $43.95 million, said Michael Comparato of Compson.
Compson of Boca Raton, Fla., bought the building at 250 Gibralter Road in Horsham, Pa., in October 2004 for $38 million. Toll, a luxury homebuilder, occupies the entire building and has a lease through October 2019 with an option to extend it another 15 years. Toll initially bought the building in early 2004, gutting and totally renovating it, and relocated its headquarters from nearby Huntingdon Valley, Pa.
For Compson, a private family company, it was time to sell. "When the price is right, the price is right," Comparato said. Sphere: Related Content
The office building where Toll Brothers Inc. makes its headquarters has changed hands. Compson Holding Corp. sold the 203,000-square-foot, suburban Philadelphia building to an undisclosed Atlanta-based private investor for $43.95 million, said Michael Comparato of Compson.
Compson of Boca Raton, Fla., bought the building at 250 Gibralter Road in Horsham, Pa., in October 2004 for $38 million. Toll, a luxury homebuilder, occupies the entire building and has a lease through October 2019 with an option to extend it another 15 years. Toll initially bought the building in early 2004, gutting and totally renovating it, and relocated its headquarters from nearby Huntingdon Valley, Pa.
For Compson, a private family company, it was time to sell. "When the price is right, the price is right," Comparato said. Sphere: Related Content
Tuesday, February 20, 2007
Sotheby's Manhattan HQ For Sale for $500 Million
MSN Money / Financial Times - February 18, 2007
Sotheby's in New York, one of the world's most glamorous auction houses, is itself coming up for sale with an asking price of about $500m
It is understood that RFR Holding, the private property company that owns the building at 1334 York Avenue on Manhattan's Upper East Side, has hired agents Jones Lang LaSalle to sell the property.
Sotheby's, which was set up in 1744, has been in New York for nearly 100 years and will remain at the site as a tenant of the new owner.
Sotheby's bought the site for just $11m in 2000. But the auction house has spent $140m on a giant makeover that increased it from four floors to 10 and created a total of 470,000 sq ft of space. Architects Kohn Pedersen Fox, which oversaw the redevelopment, replaced the building's old granite front with glass in various degrees of transparency, creating what one tourist guide now calls an "ethereal box".
RFR bought the building for $175m in 2002 in a sale-and-leaseback under which Sotheby's would remain for up to 40 years. The New York property company subsequently brought in Sachsenfonds, a German fund, as an investment partner.
In the past five years, property values in New York – and globally – have soared, pushing cap rates (yields) down to record lows, prompting the sale. Sphere: Related Content
Sotheby's in New York, one of the world's most glamorous auction houses, is itself coming up for sale with an asking price of about $500m
It is understood that RFR Holding, the private property company that owns the building at 1334 York Avenue on Manhattan's Upper East Side, has hired agents Jones Lang LaSalle to sell the property.
Sotheby's, which was set up in 1744, has been in New York for nearly 100 years and will remain at the site as a tenant of the new owner.
Sotheby's bought the site for just $11m in 2000. But the auction house has spent $140m on a giant makeover that increased it from four floors to 10 and created a total of 470,000 sq ft of space. Architects Kohn Pedersen Fox, which oversaw the redevelopment, replaced the building's old granite front with glass in various degrees of transparency, creating what one tourist guide now calls an "ethereal box".
RFR bought the building for $175m in 2002 in a sale-and-leaseback under which Sotheby's would remain for up to 40 years. The New York property company subsequently brought in Sachsenfonds, a German fund, as an investment partner.
In the past five years, property values in New York – and globally – have soared, pushing cap rates (yields) down to record lows, prompting the sale. Sphere: Related Content
Friday, February 16, 2007
Rex Stores Agrees to $84 Million Sale Leaseback of 94 Stores
BusinessWeek - February 13, 2007
Rex Stores Corp., which operates stores selling consumer electronics and appliances, on Tuesday said it agreed to sell 94 of its current and former store locations for about $84 million to Coventry Real Estate Investments LLC.
The company will also lease back at least 40 of the properties for an initial lease term expiring Jan. 31, 2010. The leases will contain renewal options for up to 15 additional years. Rex is still determining which properties it will lease back from Coventry, which are worth about $66.5 million on its books.
Rex plans to use proceeds from the sale to pay off about $17 million to $19 million in mortgage debt related to the properties, fund alternative energy projects and for other general corporate purposes. The company expects to close the deal April 30. Sphere: Related Content
Rex Stores Corp., which operates stores selling consumer electronics and appliances, on Tuesday said it agreed to sell 94 of its current and former store locations for about $84 million to Coventry Real Estate Investments LLC.
The company will also lease back at least 40 of the properties for an initial lease term expiring Jan. 31, 2010. The leases will contain renewal options for up to 15 additional years. Rex is still determining which properties it will lease back from Coventry, which are worth about $66.5 million on its books.
Rex plans to use proceeds from the sale to pay off about $17 million to $19 million in mortgage debt related to the properties, fund alternative energy projects and for other general corporate purposes. The company expects to close the deal April 30. Sphere: Related Content
Thursday, February 15, 2007
Polimoon Closes $44 Million Sale and Leaseback of Properties in Norway and Denmark
HUGIN Online - February 12, 2007
Norwegian Plastics firm Polimoon has concluded the sale and leaseback of the three properties in Norway and one property in Denmark to a property fund established by Orkla Finans at what is considered favorably terms.
The gross proceeds were 270m NOK, generating a gain of 180 mNOK prior to tax and any fair value assessments. After payment of tax the net cash proceeds are approximately 240 mNOK. The rent, through a 15 year agreement is 19 mNOK annually and subject to a fixed 2% indexations.
After the sale and leaseback Polimoon is still a substantial owner, with 17 properties in excess of 140.000 square metres under roof. Sphere: Related Content
Norwegian Plastics firm Polimoon has concluded the sale and leaseback of the three properties in Norway and one property in Denmark to a property fund established by Orkla Finans at what is considered favorably terms.
The gross proceeds were 270m NOK, generating a gain of 180 mNOK prior to tax and any fair value assessments. After payment of tax the net cash proceeds are approximately 240 mNOK. The rent, through a 15 year agreement is 19 mNOK annually and subject to a fixed 2% indexations.
After the sale and leaseback Polimoon is still a substantial owner, with 17 properties in excess of 140.000 square metres under roof. Sphere: Related Content
Accor Agrees to £439 Million Sale Leaseback of 30 UK Hotels
CatererSearch - February 12, 2007
French hotel operator Accor has negotiated a sale-and-leaseback deal on one-third of its UK portfolio. It has agreed heads of terms to sell 30 hotels to Land Securities Trillium (LST), the property partnership business of Land Securities Group. The sale is worth £439m and LST has pledged to inject around £35m in cash over the next four years to improve the properties.
Land Securities Trillium will lease the hotels back to Accor on 84-year leases and charge a rental income based on an agreed percentage of turnover. Based on their 2006 performance, the 30 hotels would have generated an annual gross rent of more than £27m. The hotels involved are mostly city centre properties operated under the two-star Ibis and three-star Novotel brands, with a strong weighting towards London.
“This partnership, as part of Accor’s real estate management strategy, will allow Accor to accelerate its expansion plan in the UK and de-risk its operational structure by moving to a fully variable lease arrangement,” commented Jacques Sterm, chief financial officer at Accor. Sphere: Related Content
French hotel operator Accor has negotiated a sale-and-leaseback deal on one-third of its UK portfolio. It has agreed heads of terms to sell 30 hotels to Land Securities Trillium (LST), the property partnership business of Land Securities Group. The sale is worth £439m and LST has pledged to inject around £35m in cash over the next four years to improve the properties.
Land Securities Trillium will lease the hotels back to Accor on 84-year leases and charge a rental income based on an agreed percentage of turnover. Based on their 2006 performance, the 30 hotels would have generated an annual gross rent of more than £27m. The hotels involved are mostly city centre properties operated under the two-star Ibis and three-star Novotel brands, with a strong weighting towards London.
“This partnership, as part of Accor’s real estate management strategy, will allow Accor to accelerate its expansion plan in the UK and de-risk its operational structure by moving to a fully variable lease arrangement,” commented Jacques Sterm, chief financial officer at Accor. Sphere: Related Content
Friday, February 09, 2007
Max Bahr Completes EUR 750.9 Million Sale Leaseback of German DIY Store Portfolio
ABN AMRO Web Site - February 7, 2007
The Structured Real Estate Capital team at ABN AMRO has successfully closed a EUR750.9 million secured real estate finance deal in Germany. The facility is provided by ABN AMRO to a joint venture Special Purpose Vehicle with equity participation from Moor Park Capital Partners and Praktiker. It will debt-finance the purchase of Max Bahr, the eighth biggest DIY house in Germany.
The transaction worked as an Opco/ Propco structure splitting the operational side of Max Bahr from its properties. Praktiker, the number two DIY business in Germany, purchased the operations side of the business. Moor Park, a real estate advisory team led by three ex-Nomura International directors, purchased the property through the ABN AMRO debt finance facility and will lease it back to Praktiker. The Propco consists of approximately 101 properties.
As part of this landmark deal, Praktiker structured 20 year triple net leases with the Propco on the majority of the Max Bahr real estate portfolio. The rent received will be used to service the ABN AMRO debt. Sphere: Related Content
The Structured Real Estate Capital team at ABN AMRO has successfully closed a EUR750.9 million secured real estate finance deal in Germany. The facility is provided by ABN AMRO to a joint venture Special Purpose Vehicle with equity participation from Moor Park Capital Partners and Praktiker. It will debt-finance the purchase of Max Bahr, the eighth biggest DIY house in Germany.
The transaction worked as an Opco/ Propco structure splitting the operational side of Max Bahr from its properties. Praktiker, the number two DIY business in Germany, purchased the operations side of the business. Moor Park, a real estate advisory team led by three ex-Nomura International directors, purchased the property through the ABN AMRO debt finance facility and will lease it back to Praktiker. The Propco consists of approximately 101 properties.
As part of this landmark deal, Praktiker structured 20 year triple net leases with the Propco on the majority of the Max Bahr real estate portfolio. The rent received will be used to service the ABN AMRO debt. Sphere: Related Content
Wednesday, February 07, 2007
J Sainsbury Ponders £7.5 Billion Sale Leaseback of UK Store Portfolio
The Guardian - February 5, 2007
J Sainsbury could consider selling its huge property portfolio to fend off a takeover if last week's interest from private equity turns into a formal approach.
According to reports over the weekend, Sainsbury's and its bankers Morgan Stanley may see a sale and leaseback as one way to guard against a takeover although sources close to the company last night questioned the longer-term logic of such a move.
Last week Sainsbury's stock market value soared by more than £1bn as three of the biggest private equity groups revealed they were considering a bid. Its shares leapt 14%, by 61.75p to an eight-year high of 507p on Friday, taking its stock market value to £8.7bn.
In a statement to the stock exchange CVC, Blackstone and Kohlberg Kravis Roberts said they were only at the "preliminary stages" of assessing a bid. There has also been speculation of a possible rival bid from Texas Pacific, another private equity group. Sainsbury's has said only that it "noted" the CVC statement and that no proposal had been received.
One attraction for the consortium is Sainsbury's property portfolio. The 750-strong chain has property estimated to be valued at £7.5bn. One option could be for Sainsbury's to beat the private equity bidders to it and sell off the property itself. Sphere: Related Content
J Sainsbury could consider selling its huge property portfolio to fend off a takeover if last week's interest from private equity turns into a formal approach.
According to reports over the weekend, Sainsbury's and its bankers Morgan Stanley may see a sale and leaseback as one way to guard against a takeover although sources close to the company last night questioned the longer-term logic of such a move.
Last week Sainsbury's stock market value soared by more than £1bn as three of the biggest private equity groups revealed they were considering a bid. Its shares leapt 14%, by 61.75p to an eight-year high of 507p on Friday, taking its stock market value to £8.7bn.
In a statement to the stock exchange CVC, Blackstone and Kohlberg Kravis Roberts said they were only at the "preliminary stages" of assessing a bid. There has also been speculation of a possible rival bid from Texas Pacific, another private equity group. Sainsbury's has said only that it "noted" the CVC statement and that no proposal had been received.
One attraction for the consortium is Sainsbury's property portfolio. The 750-strong chain has property estimated to be valued at £7.5bn. One option could be for Sainsbury's to beat the private equity bidders to it and sell off the property itself. Sphere: Related Content
Tuesday, February 06, 2007
Icon Nearing EUR 80 Million Sale Leaseback on Dublin HQ
The Post - February 4, 2007
The sale of Icon’s headquarters in the South County Business Park in Leopardstown, Dublin 18, will probably be complete by the end of the week. However, rumours that a technology entrepreneur had bought the buildings are untrue.
Icon, the clinical research organisation, is expected to secure up to €80 million for the four new office blocks and its existing headquarters. That selling price would reflect a yield of 4.75 per cent.
The company is to build four four-storey office blocks linked by a glass atrium to the existing headquarters building on the site. That will extend the total size of the facility to 15,868 square metres on a site which measures just over 4.5 acres. The first of the blocks is due for completion next month.
Under the terms of the sale and leaseback, the rent payable by Icon will equate to between €247 and €258 per square metres and in addition it will pay €1,000 annually for each of the 338 car parking spaces. The leases are for 20 years with upward-only rent reviews and a break option in year 15. Sphere: Related Content
The sale of Icon’s headquarters in the South County Business Park in Leopardstown, Dublin 18, will probably be complete by the end of the week. However, rumours that a technology entrepreneur had bought the buildings are untrue.
Icon, the clinical research organisation, is expected to secure up to €80 million for the four new office blocks and its existing headquarters. That selling price would reflect a yield of 4.75 per cent.
The company is to build four four-storey office blocks linked by a glass atrium to the existing headquarters building on the site. That will extend the total size of the facility to 15,868 square metres on a site which measures just over 4.5 acres. The first of the blocks is due for completion next month.
Under the terms of the sale and leaseback, the rent payable by Icon will equate to between €247 and €258 per square metres and in addition it will pay €1,000 annually for each of the 338 car parking spaces. The leases are for 20 years with upward-only rent reviews and a break option in year 15. Sphere: Related Content
Sunday, February 04, 2007
LG Electronics Signs Long Term Lease for 750,000-SF Distribution Center in NJ
Commercial Property News - February 2, 2007
In one of New Jersey's biggest single industrial leasing deals in the last 12 months, distribution facilities provider ProLogis has signed on LG Electronics Inc. to occupy a 740,000-square-foot building in South Brunswick. The Central New Jersey warehouse (pictured) will serve as a northeast distribution center for LG products.
Sited off Interchange 8A of the New Jersey Turnpike, LG's new building was developed by ProLogis in 2005. The warehouse boasts a location with easy access to the bustling Port of New York/New Jersey and Newark Liberty International Airport.
Trammell Crow Co. represented LG in the lease transaction, while ProLogis relied on internal representation. Specific terms of the triple net lease were not disclosed; however, the fourth quarter average asking rate for industrial space in the 8A submarket was $4.89 per square-foot, triple net, as per a report by real estate services firm Colliers Houston & Co.
For LG Electronics, the lease allows the company to consolidate two facilities under one roof, and to expand its total square footage in the market. As for the length of the lease, Loosmann described it as a "commitment by LG to the Central New Jersey market on a long-term basis." Sphere: Related Content
In one of New Jersey's biggest single industrial leasing deals in the last 12 months, distribution facilities provider ProLogis has signed on LG Electronics Inc. to occupy a 740,000-square-foot building in South Brunswick. The Central New Jersey warehouse (pictured) will serve as a northeast distribution center for LG products.
Sited off Interchange 8A of the New Jersey Turnpike, LG's new building was developed by ProLogis in 2005. The warehouse boasts a location with easy access to the bustling Port of New York/New Jersey and Newark Liberty International Airport.
Trammell Crow Co. represented LG in the lease transaction, while ProLogis relied on internal representation. Specific terms of the triple net lease were not disclosed; however, the fourth quarter average asking rate for industrial space in the 8A submarket was $4.89 per square-foot, triple net, as per a report by real estate services firm Colliers Houston & Co.
For LG Electronics, the lease allows the company to consolidate two facilities under one roof, and to expand its total square footage in the market. As for the length of the lease, Loosmann described it as a "commitment by LG to the Central New Jersey market on a long-term basis." Sphere: Related Content
Swiss Re Enters $1.18 Billion Sale and Partial Leaseback on London HQ Tower
The Times - February 2, 2007
A niche Mayfair-based investment bank has intervened in the £600 million ($1.18 billion) purchase of London’s Swiss Re Tower, better known as the Gherkin. The 180m (590ft) building at 30 St Mary Axe is set to be the UK’s most expensive office block after its owners, Swiss Re, secured a deal with IVG Asti-cus, the German investment firm, in December. But Evans Randall is poised to take a half share in the 40-storey skyscraper after setting up a joint venture with IVG.
The Gherkin, designed by Lord Foster of Thames Bank, and opened in April 2004 to widespread critical acclaim, is the ultimate in landmark acquisitions. The building is also occupied by an array of reliable and high-profile tenants, including Swiss Re, which has the 15 bottom floors. It is thought that the insurer is taking a 25-year lease on the building. Other tenants include Allianz, the German insurer and Coutts, the private bank.
Evans Randall usually underwrites each deal itself with high levels of gearing then sells equity stakes to a network of wealthy investors. Selling the Swiss Re Tower at £600 million represents a yield of about 4.75 per cent, reflecting the strength of investor demand for City offices. The highest price to date for a single office building is the £520 million paid last January for CityPoint, a 36-storey tower on Ropemaker Street, at a yield of 5.8 per cent.
Evans Randall and IVG are being advised by CB Richard Ellis and Knight Frank. Sphere: Related Content
A niche Mayfair-based investment bank has intervened in the £600 million ($1.18 billion) purchase of London’s Swiss Re Tower, better known as the Gherkin. The 180m (590ft) building at 30 St Mary Axe is set to be the UK’s most expensive office block after its owners, Swiss Re, secured a deal with IVG Asti-cus, the German investment firm, in December. But Evans Randall is poised to take a half share in the 40-storey skyscraper after setting up a joint venture with IVG.
The Gherkin, designed by Lord Foster of Thames Bank, and opened in April 2004 to widespread critical acclaim, is the ultimate in landmark acquisitions. The building is also occupied by an array of reliable and high-profile tenants, including Swiss Re, which has the 15 bottom floors. It is thought that the insurer is taking a 25-year lease on the building. Other tenants include Allianz, the German insurer and Coutts, the private bank.
Evans Randall usually underwrites each deal itself with high levels of gearing then sells equity stakes to a network of wealthy investors. Selling the Swiss Re Tower at £600 million represents a yield of about 4.75 per cent, reflecting the strength of investor demand for City offices. The highest price to date for a single office building is the £520 million paid last January for CityPoint, a 36-storey tower on Ropemaker Street, at a yield of 5.8 per cent.
Evans Randall and IVG are being advised by CB Richard Ellis and Knight Frank. Sphere: Related Content
Thursday, February 01, 2007
Ottawa Seeking $1.5 Billion Sale leaseback of Federal Buildings
The Globe and Mail - January 31, 2006
Ottawa is preparing to sell $1.5-billion worth of office properties across the country as part of the first phase of a plan that will see dozens of federal buildings go to the private sector with the government as a long-term tenant, sources say. Sources in Toronto and Ottawa said nine buildings are likely to go in the first phase of the sell-off, including properties in Vancouver, Toronto and Ottawa.
The deal could hit the market within weeks and would be among the largest offerings of Canadian office properties. Public Works Minister Michael Fortier refused to comment on the status of the plan, but made clear the government's real-estate portfolio is in for a shakeup. The government is expected to use a process known as a "sale-leaseback," by which it sells the buildings to the private sector and then rents them. The government is expected to use 25-year leases, sources said.
Mr. Fortier argued the government doesn't have the $4-billion needed to maintain adequately its portfolio of 6.8 million square metres of office space. Under the planned "partnerships," sources said, the private-sector companies would renovate the buildings at their cost and make money by renting them to the government. The government's 241,000 employees could thus work in better, more energy-efficient buildings.
"The government has not always taken care of its buildings in the same way as a traditional real-estate owner," Mr. Fortier said, pointing out that several buildings are in a "precarious" state. Sphere: Related Content
Ottawa is preparing to sell $1.5-billion worth of office properties across the country as part of the first phase of a plan that will see dozens of federal buildings go to the private sector with the government as a long-term tenant, sources say. Sources in Toronto and Ottawa said nine buildings are likely to go in the first phase of the sell-off, including properties in Vancouver, Toronto and Ottawa.
The deal could hit the market within weeks and would be among the largest offerings of Canadian office properties. Public Works Minister Michael Fortier refused to comment on the status of the plan, but made clear the government's real-estate portfolio is in for a shakeup. The government is expected to use a process known as a "sale-leaseback," by which it sells the buildings to the private sector and then rents them. The government is expected to use 25-year leases, sources said.
Mr. Fortier argued the government doesn't have the $4-billion needed to maintain adequately its portfolio of 6.8 million square metres of office space. Under the planned "partnerships," sources said, the private-sector companies would renovate the buildings at their cost and make money by renting them to the government. The government's 241,000 employees could thus work in better, more energy-efficient buildings.
"The government has not always taken care of its buildings in the same way as a traditional real-estate owner," Mr. Fortier said, pointing out that several buildings are in a "precarious" state. Sphere: Related Content
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