Wall Street Journal - March 10, 2009
New York Times Co. said it has raised $225 million in a sale-leaseback of most of its share of its 52-story Manhattan headquarters building, gaining much-needed debt relief as it tries to weather the advertising slump imperiling newspaper companies.
The New York Times struck a deal in which it will sell its share of its midtown headquarters, above, and lease it back for up to 15 years.
Under the terms of the transaction, the real-estate investment firm W.P. Carey & Co. LLC will pay the sum for the 21 floors occupied by the Times, which then will lease the space back for up to 15 years, with an option to buy it back in 2019 for $250 million. The company will use the proceeds from the sale-leaseback to retire $250 million in notes due in 2010.
The deal gives the Times the cash infusion it was seeking when it announced its plans for a sale-leaseback in December.
With more than $1 billion in debt maturing in the next couple of years and a gloomy forecast for print advertising revenue, the publisher effectively has been building a bridge to 2011, albeit at a cost. In January, it received a $250 million loan from Mexican billionaire Carlos Slim, and last month the Times Co. board voted to suspend the quarterly dividend.
The loan by Mr. Slim, which came with warrants for a stake in the company, carries a 14% interest rate, and the leaseback agreement calls for the company to pay $24 million in rent in the first year. At about $55 per square foot, including operating costs and taxes, the initial rent is well within the market rate, though rent payments will increase in later years.
Times Co. so far has avoided making another round of job cuts, although some Times staffers say there is mounting fear in the newsroom that cuts may be imminent. A Times Co. spokeswoman declined to comment. Job-cutting has been widespread in the industry. On Monday, McClatchy Co., owner of the Miami Herald, said it would cut 1,600 jobs, or about 15% of its work force, and reduce wages across the company. The debt-burdened company carried out successive rounds of 10% staff cuts last year.
Times Co. owned a 58% stake in the headquarters building, which was completed in 2007. Forest City Ratner, the Times's partner in developing the tower and the owner of the top floors of the building, took out a $640 million mortgage against its portion of the property in 2007.
As falling revenues have coincided with looming debt obligations and tightening credit, some critics say the Renzo Piano-designed building has become a symbol of bad timing for Times Co., which sold its old headquarters building in 2004 for $175 million to Tishman Speyer Properties LP. Tishman Speyer later sold it for three times that amount. Times executives have said they couldn't have foreseen the subsequent explosion of real estate.
Advertising revenue has fallen sharply at the Times, as it has at other newspaper publishers, leading Times Co. to take a number of steps to conserve cash. Besides cutting and later suspending the quarterly dividend, it recently announced it is trying to sell its nearly 18% stake in the company that owns the Boston Red Sox.
Sphere: Related Content
Thursday, March 12, 2009
Wednesday, March 11, 2009
Burlington Coat Factory Seeking Sale Leaseback of Two Distribution Centers in NJ
PhillyBurbs.com - March 9, 2009
The Burlington Coat Factory has put its massive Cooper Street distribution center and its Burlington Township corporate headquarters up for sale but plans to lease back most of the space once the buildings are sold.
The company has hired Jones Lang LaSalle, a Chicago-based financial and professional services firm, to market and sell the combined 1.25 million-square-foot, two-building industrial portfolio, according to a news release posted on JLL's Web site.
The corporation's Burlington facility, located on Route 130 North, will be partially occupied and leased back by Burlington Coat Factory as its corporate headquarters for a term of 10 years with renewal options, according to the release. The release also states about 380,000 square feet of warehouse space at the Burlington facility is expected to become available to another tenant in July.
The release indicated the Edgewater Park facility would be leased back to Burlington Coat Factory if sold.
Brian Smith, a spokesman for JLL, said last week his firm is not prepared to discuss any further details regarding the properties.
Construction on the Edgewater Park distribution center began in 2001 at a cost of $30 million and the facility opened in 2003, shipping merchandise to 427 stores in 44 states and Puerto Rico.
The formerly family-owned Burlington Coat Factory was sold to a private equity firm, Boston-based Bain Capital Partners, for $2.06 billion in 2006.
Edgewater Park entered into a 30-year tax-abatement program or PILOT (payment in lieu of taxes) agreement with Burlington Coat Factory in 2002. Under the agreement, the Coat Factory paid the township $147,500 a year for the first five years. Payments increase 3.3 percent a year (beginning in 2008) until the 31st year, 2034, when the property will be subject to the township's regular tax rate.
Mount said even if the building ultimately ends up being owned by another company, it should not affect the agreement as long as the building still serves the same purpose.
According to the JLL release, the Edgewater Park facility is undergoing $21 million in capital investments including new racking and sprinkler systems, mechanical and electrical upgrades and other site work expected to be completed by the third quarter of this year.
According to CoStar Group, a commercial real estate information company, 2009 has seen a flurry of industrial transactions as national retailers looked to unload corporate headquarters and distribution facilities.
CoStar reports that partial leaseback transactions - in which a company sells an entire building or portfolio but only leases back certain buildings or portions of buildings - are on the rise as shrinking companies work to economize on space and operating costs. Sphere: Related Content
The Burlington Coat Factory has put its massive Cooper Street distribution center and its Burlington Township corporate headquarters up for sale but plans to lease back most of the space once the buildings are sold.
The company has hired Jones Lang LaSalle, a Chicago-based financial and professional services firm, to market and sell the combined 1.25 million-square-foot, two-building industrial portfolio, according to a news release posted on JLL's Web site.
The corporation's Burlington facility, located on Route 130 North, will be partially occupied and leased back by Burlington Coat Factory as its corporate headquarters for a term of 10 years with renewal options, according to the release. The release also states about 380,000 square feet of warehouse space at the Burlington facility is expected to become available to another tenant in July.
The release indicated the Edgewater Park facility would be leased back to Burlington Coat Factory if sold.
Brian Smith, a spokesman for JLL, said last week his firm is not prepared to discuss any further details regarding the properties.
Construction on the Edgewater Park distribution center began in 2001 at a cost of $30 million and the facility opened in 2003, shipping merchandise to 427 stores in 44 states and Puerto Rico.
The formerly family-owned Burlington Coat Factory was sold to a private equity firm, Boston-based Bain Capital Partners, for $2.06 billion in 2006.
Edgewater Park entered into a 30-year tax-abatement program or PILOT (payment in lieu of taxes) agreement with Burlington Coat Factory in 2002. Under the agreement, the Coat Factory paid the township $147,500 a year for the first five years. Payments increase 3.3 percent a year (beginning in 2008) until the 31st year, 2034, when the property will be subject to the township's regular tax rate.
Mount said even if the building ultimately ends up being owned by another company, it should not affect the agreement as long as the building still serves the same purpose.
According to the JLL release, the Edgewater Park facility is undergoing $21 million in capital investments including new racking and sprinkler systems, mechanical and electrical upgrades and other site work expected to be completed by the third quarter of this year.
According to CoStar Group, a commercial real estate information company, 2009 has seen a flurry of industrial transactions as national retailers looked to unload corporate headquarters and distribution facilities.
CoStar reports that partial leaseback transactions - in which a company sells an entire building or portfolio but only leases back certain buildings or portions of buildings - are on the rise as shrinking companies work to economize on space and operating costs. Sphere: Related Content
Monday, March 09, 2009
2009: Year of the Leaseback
Property Week - March 6, 2009
Troubled occupiers are looking to raise funds by selling and leasing back their properties.
Last month it emerged that Banco Bilbao Vizcaya Argentaria (BBVA) was in talks with global fund manager RREEF to sell and leaseback €1bn (£894m) of its property assets. The Spanish banking group, which last month sold its Madrid headquarters to German fund manager Deka in recent weeks, was following in the footsteps of its Italian counterpart, UniCredit. In January, it banked a €280m (£250bn) profit when it placed a domestic portfolio, including its Milan headquarters, into a fund, sold 62% to investors and agreed to lease the properties back for 18 years.
Over the last few weeks more companies have announced they are looking to do the same, now that their access to traditional sources of cash has been closed off. Real estate sales could be the only way to raise capital, as the debt markets look set to remain closed for the rest of the year and bond issues are so expensive that they are no longer cost-effective – assuming the firms issuing bonds can find buyers for them in the first place.
In a bid to refinance its debts, the New York Times Company is set to raise $225m (£157m) from investment firm WP Carey by selling part of its Manhattan headquarters. European manufacturer Infineon Technologies also said last month that it is considering doing the same.
The recent spate of activity began in January 2008 with Banco Santander’s disposal of almost all its properties in Spain. It sold the portfolio for €4.4bn (£3.9bn) and generated a net capital gain of €1.7bn (£1.5bn), €281m (£251m) more than it expected.
Since then, CB Richard Ellis estimates that 600 deals were completed across Europe, which represented 19% of all transactions for the year. John Wilson, head of CBRE’s corporate strategies group for Europe, the Middle East and Africa, believes this trend will continue in 2009, and says the firm is about to put €3bn (£2.7bn) of sale and leaseback property on the market.
Wilson says leasebacks are becoming increasingly popular not only with banks, but with manufacturing and pharmaceutical firms too. ‘The manufacturing industry has probably been the worst hit,’ he says. ‘It was continuing to make things in the hope that the economic downturn would be a short blip, instead of trading down or trying to reduce costs. But when the banks foundered, the drawbridge went up and corporations could not borrow the money they needed. Now they are stuck.’
Wilson says real estate sales can be the most cost-effective option for companies, despite the fall in property prices.
‘The advantage of sale and leasebacks is you don’t have to pay the money back,’ he says. Wilson adds that CBRE is receiving an unprecedented number of enquiries from firms that are looking to sell, even though they realise they may do so at discounts to book values.
In the US, professional services firms are anticipating the same. ‘There is hesitation right now because corporations are unsure of how to price their assets,’ says Peter Capuciati, executive vice-president of tenant representation firm Studley. ‘There is no market to mark to. But I think this will be momentary and companies will come to accept lower valuations because they have to. Real estate is the only game in town.’
Hope over experience
But aspirations alone do not a market make. The lack of finance for any kind of transaction means that sale and leasebacks, like any other type of deal in the present market, will not be easy for investors to complete.
Buyers are still reliant on the debt markets, and are more wary than ever before of the risk of tenants defaulting. This means they are being highly selective.
Tom Quigley, managing director of WP Carey, says the firm is looking globally for sale and leasebacks, but he is sceptical that there is enough cash to meet the demand. ‘We are seeing more deals [on offer], but there isn’t enough capital around to satisfy it,’ he says. ‘The lack of finance makes it hard to get deals done.’
Quigley says the lack of debt will preclude many corporations from being able to offload their property. ‘For many buyers, a deal will only make sense if you can borrow a substantial amount of the purchase price,’ he says.
General Motors is one company that appears to have been frustrated in its attempts to sell and leaseback its assets. In November, the carmaker put $750m (£524m) of properties on the market, including its Renaissance Center headquarters in Detroit. But it has not sold any of these properties to date.
Julian Lyon, manager of European real estate at General Motors, agrees that lack of finance is an obstacle. ‘The sale-and-leaseback market was better two years ago because there were more buyers with cash and substantial debt finance,’ he says. ‘The pool of buyers for these deals is very small because buyers are looking for chunky yields to reflect the absence of debt.’
With €1bn (£894m) of equity to invest in Europe and $2bn (£1.4bn) to invest in Asia, property fund manager MGPA is one would-be buyer. But the economic climate has deterred it from deals that involve a lease to a single tenant.
Alex Jeffrey, CEO of MGPA’s European operations, says: ‘We have looked at a number of portfolios, but we are often concerned about the tenant’s covenant. The companies that need to sell owner-occupied properties today are often those with lower creditworthiness. But even for stable companies, there is a higher risk of default because of the economic downturn. This is the factor that will restrict the markets.’
German open-ended fund manager Union Investment is also on the lookout for opportunities. In December, it bought the Portico building in Madrid and leased it back to tourism firm Grupo Marsans. Union says it is ‘deeply interested’ in deals in good locations for properties that can accommodate various uses, but says it is finding it hard to uncover good deals.
Karl-Joseph Hermanns-Engel, managing director of Union, says: ‘First-class investments are not readily available at the moment. For us, credit assessment is getting more and more important. And because these deals are often for a single tenant, we have to check risk very thoroughly.’
Default danger
For many would-be investors, the collapse of Lehman brought home the risk of tenant default. Quigley says WP Carey is seeking deals with ‘recession-resilient companies’ – such as utilities firms and food retailers, which do not rely on discretionary spending – and that it is avoiding riskier operations such as car retailers. ‘We were always very credit-focused, but in the current climate we are only seeking deals with high-quality companies.’
The chaos surrounding valuations has also made it difficult for owner-occupiers to know what prices they should be asking for. However, Quigley says he is seeing a lot of properties on offer at initial yields of 8% or more.
‘We walked away from deals because pricing was too aggressive, and have since been proven right,’ he says. ‘The debt markets are still as fragile as they were in 2008. But we are seeing some deals with good-quality assets and at prices which make sense.’
Though corporations are turning to the property markets, many are likely to be thwarted in their attempts to dispose of assets and raise the cash they need. Until the banks start lending again, only a few lucky owner-occupiers will find the help they need from real estate. And when the debt market does return, selling assets may not be such a good opportunity. Sphere: Related Content
Troubled occupiers are looking to raise funds by selling and leasing back their properties.
Last month it emerged that Banco Bilbao Vizcaya Argentaria (BBVA) was in talks with global fund manager RREEF to sell and leaseback €1bn (£894m) of its property assets. The Spanish banking group, which last month sold its Madrid headquarters to German fund manager Deka in recent weeks, was following in the footsteps of its Italian counterpart, UniCredit. In January, it banked a €280m (£250bn) profit when it placed a domestic portfolio, including its Milan headquarters, into a fund, sold 62% to investors and agreed to lease the properties back for 18 years.
Over the last few weeks more companies have announced they are looking to do the same, now that their access to traditional sources of cash has been closed off. Real estate sales could be the only way to raise capital, as the debt markets look set to remain closed for the rest of the year and bond issues are so expensive that they are no longer cost-effective – assuming the firms issuing bonds can find buyers for them in the first place.
In a bid to refinance its debts, the New York Times Company is set to raise $225m (£157m) from investment firm WP Carey by selling part of its Manhattan headquarters. European manufacturer Infineon Technologies also said last month that it is considering doing the same.
The recent spate of activity began in January 2008 with Banco Santander’s disposal of almost all its properties in Spain. It sold the portfolio for €4.4bn (£3.9bn) and generated a net capital gain of €1.7bn (£1.5bn), €281m (£251m) more than it expected.
Since then, CB Richard Ellis estimates that 600 deals were completed across Europe, which represented 19% of all transactions for the year. John Wilson, head of CBRE’s corporate strategies group for Europe, the Middle East and Africa, believes this trend will continue in 2009, and says the firm is about to put €3bn (£2.7bn) of sale and leaseback property on the market.
Wilson says leasebacks are becoming increasingly popular not only with banks, but with manufacturing and pharmaceutical firms too. ‘The manufacturing industry has probably been the worst hit,’ he says. ‘It was continuing to make things in the hope that the economic downturn would be a short blip, instead of trading down or trying to reduce costs. But when the banks foundered, the drawbridge went up and corporations could not borrow the money they needed. Now they are stuck.’
Wilson says real estate sales can be the most cost-effective option for companies, despite the fall in property prices.
‘The advantage of sale and leasebacks is you don’t have to pay the money back,’ he says. Wilson adds that CBRE is receiving an unprecedented number of enquiries from firms that are looking to sell, even though they realise they may do so at discounts to book values.
In the US, professional services firms are anticipating the same. ‘There is hesitation right now because corporations are unsure of how to price their assets,’ says Peter Capuciati, executive vice-president of tenant representation firm Studley. ‘There is no market to mark to. But I think this will be momentary and companies will come to accept lower valuations because they have to. Real estate is the only game in town.’
Hope over experience
But aspirations alone do not a market make. The lack of finance for any kind of transaction means that sale and leasebacks, like any other type of deal in the present market, will not be easy for investors to complete.
Buyers are still reliant on the debt markets, and are more wary than ever before of the risk of tenants defaulting. This means they are being highly selective.
Tom Quigley, managing director of WP Carey, says the firm is looking globally for sale and leasebacks, but he is sceptical that there is enough cash to meet the demand. ‘We are seeing more deals [on offer], but there isn’t enough capital around to satisfy it,’ he says. ‘The lack of finance makes it hard to get deals done.’
Quigley says the lack of debt will preclude many corporations from being able to offload their property. ‘For many buyers, a deal will only make sense if you can borrow a substantial amount of the purchase price,’ he says.
General Motors is one company that appears to have been frustrated in its attempts to sell and leaseback its assets. In November, the carmaker put $750m (£524m) of properties on the market, including its Renaissance Center headquarters in Detroit. But it has not sold any of these properties to date.
Julian Lyon, manager of European real estate at General Motors, agrees that lack of finance is an obstacle. ‘The sale-and-leaseback market was better two years ago because there were more buyers with cash and substantial debt finance,’ he says. ‘The pool of buyers for these deals is very small because buyers are looking for chunky yields to reflect the absence of debt.’
With €1bn (£894m) of equity to invest in Europe and $2bn (£1.4bn) to invest in Asia, property fund manager MGPA is one would-be buyer. But the economic climate has deterred it from deals that involve a lease to a single tenant.
Alex Jeffrey, CEO of MGPA’s European operations, says: ‘We have looked at a number of portfolios, but we are often concerned about the tenant’s covenant. The companies that need to sell owner-occupied properties today are often those with lower creditworthiness. But even for stable companies, there is a higher risk of default because of the economic downturn. This is the factor that will restrict the markets.’
German open-ended fund manager Union Investment is also on the lookout for opportunities. In December, it bought the Portico building in Madrid and leased it back to tourism firm Grupo Marsans. Union says it is ‘deeply interested’ in deals in good locations for properties that can accommodate various uses, but says it is finding it hard to uncover good deals.
Karl-Joseph Hermanns-Engel, managing director of Union, says: ‘First-class investments are not readily available at the moment. For us, credit assessment is getting more and more important. And because these deals are often for a single tenant, we have to check risk very thoroughly.’
Default danger
For many would-be investors, the collapse of Lehman brought home the risk of tenant default. Quigley says WP Carey is seeking deals with ‘recession-resilient companies’ – such as utilities firms and food retailers, which do not rely on discretionary spending – and that it is avoiding riskier operations such as car retailers. ‘We were always very credit-focused, but in the current climate we are only seeking deals with high-quality companies.’
The chaos surrounding valuations has also made it difficult for owner-occupiers to know what prices they should be asking for. However, Quigley says he is seeing a lot of properties on offer at initial yields of 8% or more.
‘We walked away from deals because pricing was too aggressive, and have since been proven right,’ he says. ‘The debt markets are still as fragile as they were in 2008. But we are seeing some deals with good-quality assets and at prices which make sense.’
Though corporations are turning to the property markets, many are likely to be thwarted in their attempts to dispose of assets and raise the cash they need. Until the banks start lending again, only a few lucky owner-occupiers will find the help they need from real estate. And when the debt market does return, selling assets may not be such a good opportunity. Sphere: Related Content
Sunday, March 08, 2009
Saks Fifth Avenue Mulling Sale Leaseback of a Portion of its US Store Portfolio?
Bloomberg - March 4, 2009
Saks Inc. Chief Financial Officer Kevin Wills told investors the unprofitable luxury retailer has “very valuable” real estate assets it could tap to raise money if needed.
Easier said than done. Plunging real estate prices and tighter credit markets would make it difficult for New York-based Saks to harness the value of its properties, according to Dan Fasulo, managing director of Real Capital Analytics; Richard Hastings, who tracks the consumer industry for Global Hunter Securities LLC; and retail analyst Patricia Edwards.
Saks, which had $10 million in cash at yearend, would most likely try to use its real estate as collateral for borrowing if it requires additional funding, Hastings said. It alternatively may seek to sell and lease back its most valuable properties, including the Fifth Avenue flagship store, or try to use the real estate to lure a buyer for the company, he said.
Lender agreements allow Saks to pursue the sale and leaseback of some properties, CFO Wills said on a conference call last week. The company has “ample capacity” under a revolving credit facility, he said.
‘Very Valuable’
“We’re going to be free cash flow positive,” he said. “But we also realize that if we needed to do something, we have very valuable real estate that provides us flexibility.”
Saks owns 30 of its 53 Saks Fifth Avenue locations, including stores in Chicago, Beverly Hills, Las Vegas and Atlanta. It listed its property and equipment at $1.06 billion as of Jan. 31, compared with a $301 million market value at today’s close.
A year ago, Saks’s market value was twice its book value. The stock fell 13 cents, or 5.8 percent, to $2.12 at 4 p.m. in New York Stock Exchange composite trading.
In today’s real estate market, lenders will advance a maximum of 50 percent of value, compared with 80 percent before, said Jeff Bloomberg, a principal at financial advisory firm Gordon Brothers Group LLC in Boston.
“While there is still value there, it cannot be as great today as it was two years ago,” Bloomberg said.
Flagship Store
The retailer’s 350,000 square-foot Fifth Avenue store in Manhattan is now worth $550 million to $600 million, down from as much as $800 million a year ago, according to Faith Hope Consolo, chairman of the retail leasing and sales group at Prudential Douglas Elliman in New York.
The drop in values and credit crunch mean the retailer may not be able to negotiate favorable terms for borrowing, said Hastings, based in Charlotte, North Carolina. A sale-leaseback, would be viewed negatively by investors, who don’t like to see assets wiped off a balance sheet, he said, adding that he is “skeptical” that the company can find a buyer.
Saks spokeswoman Julia Bentley declined to comment on the possible scenarios.
Tiffany & Co. sold and leased back its primary locations in London and Tokyo in separate transactions for $477 million in 2007.
Sales of properties in the U.S. retail sector plunged 74 percent in 2008 from a record the previous year, according to Real Capital Analytics, a real estate data provider.
“The luxury segment of commercial real estate got hit exceptionally hard,” New York-based Fasulo said.
Clearing Inventory
Saks is getting slammed as wealthy consumers spend less on designer apparel and handbags. It reported a fourth-quarter loss Feb. 25 that was almost double analysts’ estimates after it took 75 percent markdowns to clear inventory. The retailer, which competes with Nordstrom Inc. and Neiman Marcus Group Inc., forecast a 20 percent sales decline at stores open at least a year for the first half of 2009.
Chief Executive Officer Stephen Sadove dismissed speculation on the call last week that the retailer would file for bankruptcy. He said it would hear out proposals and may choose to not exercise a so-called poison pill that limits holdings to less than 20 percent, which it reinstated in November after Mexican billionaire Carlos Slim disclosed an 18 percent stake.
Saks expects to have enough liquidity through this year under its $500 million revolving credit facility, which matures in September 2011, and on which it had $157 million outstanding as of Jan. 31, Bentley said, reiterating executives’ comments from the call.
“Two years ago, it probably would have worked perfectly” to extract value from the Saks real estate, Edwards said. “But the rose-colored glasses have been removed.” Sphere: Related Content
Saks Inc. Chief Financial Officer Kevin Wills told investors the unprofitable luxury retailer has “very valuable” real estate assets it could tap to raise money if needed.
Easier said than done. Plunging real estate prices and tighter credit markets would make it difficult for New York-based Saks to harness the value of its properties, according to Dan Fasulo, managing director of Real Capital Analytics; Richard Hastings, who tracks the consumer industry for Global Hunter Securities LLC; and retail analyst Patricia Edwards.
Saks, which had $10 million in cash at yearend, would most likely try to use its real estate as collateral for borrowing if it requires additional funding, Hastings said. It alternatively may seek to sell and lease back its most valuable properties, including the Fifth Avenue flagship store, or try to use the real estate to lure a buyer for the company, he said.
Lender agreements allow Saks to pursue the sale and leaseback of some properties, CFO Wills said on a conference call last week. The company has “ample capacity” under a revolving credit facility, he said.
‘Very Valuable’
“We’re going to be free cash flow positive,” he said. “But we also realize that if we needed to do something, we have very valuable real estate that provides us flexibility.”
Saks owns 30 of its 53 Saks Fifth Avenue locations, including stores in Chicago, Beverly Hills, Las Vegas and Atlanta. It listed its property and equipment at $1.06 billion as of Jan. 31, compared with a $301 million market value at today’s close.
A year ago, Saks’s market value was twice its book value. The stock fell 13 cents, or 5.8 percent, to $2.12 at 4 p.m. in New York Stock Exchange composite trading.
In today’s real estate market, lenders will advance a maximum of 50 percent of value, compared with 80 percent before, said Jeff Bloomberg, a principal at financial advisory firm Gordon Brothers Group LLC in Boston.
“While there is still value there, it cannot be as great today as it was two years ago,” Bloomberg said.
Flagship Store
The retailer’s 350,000 square-foot Fifth Avenue store in Manhattan is now worth $550 million to $600 million, down from as much as $800 million a year ago, according to Faith Hope Consolo, chairman of the retail leasing and sales group at Prudential Douglas Elliman in New York.
The drop in values and credit crunch mean the retailer may not be able to negotiate favorable terms for borrowing, said Hastings, based in Charlotte, North Carolina. A sale-leaseback, would be viewed negatively by investors, who don’t like to see assets wiped off a balance sheet, he said, adding that he is “skeptical” that the company can find a buyer.
Saks spokeswoman Julia Bentley declined to comment on the possible scenarios.
Tiffany & Co. sold and leased back its primary locations in London and Tokyo in separate transactions for $477 million in 2007.
Sales of properties in the U.S. retail sector plunged 74 percent in 2008 from a record the previous year, according to Real Capital Analytics, a real estate data provider.
“The luxury segment of commercial real estate got hit exceptionally hard,” New York-based Fasulo said.
Clearing Inventory
Saks is getting slammed as wealthy consumers spend less on designer apparel and handbags. It reported a fourth-quarter loss Feb. 25 that was almost double analysts’ estimates after it took 75 percent markdowns to clear inventory. The retailer, which competes with Nordstrom Inc. and Neiman Marcus Group Inc., forecast a 20 percent sales decline at stores open at least a year for the first half of 2009.
Chief Executive Officer Stephen Sadove dismissed speculation on the call last week that the retailer would file for bankruptcy. He said it would hear out proposals and may choose to not exercise a so-called poison pill that limits holdings to less than 20 percent, which it reinstated in November after Mexican billionaire Carlos Slim disclosed an 18 percent stake.
Saks expects to have enough liquidity through this year under its $500 million revolving credit facility, which matures in September 2011, and on which it had $157 million outstanding as of Jan. 31, Bentley said, reiterating executives’ comments from the call.
“Two years ago, it probably would have worked perfectly” to extract value from the Saks real estate, Edwards said. “But the rose-colored glasses have been removed.” Sphere: Related Content
Wednesday, March 04, 2009
Fletcher Closes $36 Million Sale Leaseback of Head Office in Aukland
Scoop / Bayleys - March 2, 2009
One of the country’s largest privately-owned property development companies has bought Fletcher Building’s head office complex in Auckland in a transaction worth $36 million – the biggest commercial and industrial property sale in New Zealand so far this year.
Fletcher Building has entered into a sale and long-term lease back of the suite of properties located at 810 Great South Rd in Penrose to Tauranga-based Carrus Corporation Ltd.
The sale includes the landmark Fletcher House, Fletcher Building’s head office, as well as a number of other office and industrial buildings located on 2.2 hectares of land.
The sale was negotiated by Chris O’Brien of Fletcher Building, in conjunction with David Bayley, executive director of Bayleys Real Estate, and Ed Donald of Bayleys’ Auckland office.
The property comprises approximately 17,300 square metres of predominantly office accommodation, with the balance being industrial space with a significant area of under utilised land available for future development. Fletcher companies have occupied the site for the last 65 years and a lease back arrangement will see the company remain on site for the long-term.
Fletcher Building and Carrus Corporation have developed a heads of agreement that will enable joint venture site development in the future. Carrus Corporation Ltd, led by managing director Paul Adams, has a 20-year history of land and property development.
It has been the driving force behind a substantial number of residential subdivision projects in Tauranga, Mt Maunganui, Rotorua, Hamilton, Taupo, Palmerston North and Wellington, where the company has also developed an apartment complex on Oriental Parade.
Commercial developments to date include the Porirua Megacentre, and a number of Wellington projects - the Stout Street car park and the refurbishment of the State Insurance Building and Buckle St National Museum, now part of Massey University.
Adams said the Fletcher Building site acquisition was a logical fit for Carrus - enabling the company to secure a prime freehold investment property with further development potential and occupancy by one of New Zealand's blue chip companies.
Fletcher Building property advisor Chris O’Brien said the divestment of 810 Great South Road would enable the company to further focus on its key income producing business activities.
“We look forward to exploring expansion and development options for the site with Carrus in the years to come, as Fletcher Building expands its activities and Carrus identifies best purpose long-term uses for the vacant land adjacent to the existing commercial premises,” O’Brien said.
David Bayley said the Fletcher Building offering attracted interest both nationally and internationally.
“We offered the property for sale by invitation, and in addition to approaching investment and development companies within New Zealand, we also had a number of parties from South East Asia and the United States looking seriously at it,” Bayley said.
“The fall in both the New Zealand dollar and domestic interest rates, combined with the high income returns from New Zealand commercial property, is generating more enquiry from offshore. We expect that offshore interest to gather further momentum in 2009 – particularly from South-East Asian investors who are typically counter-cyclical with their buying patterns.” Sphere: Related Content
One of the country’s largest privately-owned property development companies has bought Fletcher Building’s head office complex in Auckland in a transaction worth $36 million – the biggest commercial and industrial property sale in New Zealand so far this year.
Fletcher Building has entered into a sale and long-term lease back of the suite of properties located at 810 Great South Rd in Penrose to Tauranga-based Carrus Corporation Ltd.
The sale includes the landmark Fletcher House, Fletcher Building’s head office, as well as a number of other office and industrial buildings located on 2.2 hectares of land.
The sale was negotiated by Chris O’Brien of Fletcher Building, in conjunction with David Bayley, executive director of Bayleys Real Estate, and Ed Donald of Bayleys’ Auckland office.
The property comprises approximately 17,300 square metres of predominantly office accommodation, with the balance being industrial space with a significant area of under utilised land available for future development. Fletcher companies have occupied the site for the last 65 years and a lease back arrangement will see the company remain on site for the long-term.
Fletcher Building and Carrus Corporation have developed a heads of agreement that will enable joint venture site development in the future. Carrus Corporation Ltd, led by managing director Paul Adams, has a 20-year history of land and property development.
It has been the driving force behind a substantial number of residential subdivision projects in Tauranga, Mt Maunganui, Rotorua, Hamilton, Taupo, Palmerston North and Wellington, where the company has also developed an apartment complex on Oriental Parade.
Commercial developments to date include the Porirua Megacentre, and a number of Wellington projects - the Stout Street car park and the refurbishment of the State Insurance Building and Buckle St National Museum, now part of Massey University.
Adams said the Fletcher Building site acquisition was a logical fit for Carrus - enabling the company to secure a prime freehold investment property with further development potential and occupancy by one of New Zealand's blue chip companies.
Fletcher Building property advisor Chris O’Brien said the divestment of 810 Great South Road would enable the company to further focus on its key income producing business activities.
“We look forward to exploring expansion and development options for the site with Carrus in the years to come, as Fletcher Building expands its activities and Carrus identifies best purpose long-term uses for the vacant land adjacent to the existing commercial premises,” O’Brien said.
David Bayley said the Fletcher Building offering attracted interest both nationally and internationally.
“We offered the property for sale by invitation, and in addition to approaching investment and development companies within New Zealand, we also had a number of parties from South East Asia and the United States looking seriously at it,” Bayley said.
“The fall in both the New Zealand dollar and domestic interest rates, combined with the high income returns from New Zealand commercial property, is generating more enquiry from offshore. We expect that offshore interest to gather further momentum in 2009 – particularly from South-East Asian investors who are typically counter-cyclical with their buying patterns.” Sphere: Related Content
Wednesday, February 25, 2009
Crisis Unleashes More Sale Leasebacks
PropertyEU - February 23, 2009
Europe's sale-and-leaseback market looks set to reach an historic peak this year as occupiers increasingly look to property sales to fund their core business. With lenders keeping a tight rein on credit, corporates are being forced to look for alternative sources of financing and real estate sales are high on every boardroom agenda, says John Wilson, head of EMEA Corporate Strategies at CBRE.
Wilson: 'We have never seen so much interest from the corporate community as today. The requests we are receiving from big corporations and financial institutions are two or three times the amount we saw last year. We are currently working on about EUR 3 bn worth of deals. But the key question is: how much equity is out there?'
The sale-and-leaseback market has grown strongly in Europe over the past years, reaching EUR 46 bn in 2007 from just EUR 6.7 bn three years earlier. While investment volume slumped by 50% in 2008, occupier sales remained an important source of activity, accounting for EUR 22.2 bn worth of deals. In absolute terms, this is down on 2007's volumes but in line with the drop in transactional activity across Europe. Sphere: Related Content
Europe's sale-and-leaseback market looks set to reach an historic peak this year as occupiers increasingly look to property sales to fund their core business. With lenders keeping a tight rein on credit, corporates are being forced to look for alternative sources of financing and real estate sales are high on every boardroom agenda, says John Wilson, head of EMEA Corporate Strategies at CBRE.
Wilson: 'We have never seen so much interest from the corporate community as today. The requests we are receiving from big corporations and financial institutions are two or three times the amount we saw last year. We are currently working on about EUR 3 bn worth of deals. But the key question is: how much equity is out there?'
The sale-and-leaseback market has grown strongly in Europe over the past years, reaching EUR 46 bn in 2007 from just EUR 6.7 bn three years earlier. While investment volume slumped by 50% in 2008, occupier sales remained an important source of activity, accounting for EUR 22.2 bn worth of deals. In absolute terms, this is down on 2007's volumes but in line with the drop in transactional activity across Europe. Sphere: Related Content
Sunday, February 22, 2009
Emmelunga Enters EUR 50 Million Sale Leaseback of Five Furniture Stores in Italy
PropertyEU - January 9, 2008
Italy's furniture store chain Emmelunga has sold five of its stores in a sale-and-lease back deal with Mercurio Retail Properties for around EUR 50 mln. The stores, which are located in Italy's Tuscany and Lazio regions, represent the first acquisition made by Mercurio Retail Properties, a fund managed by CB Richard Ellis Investors. The fund is dedicated to institutional investors and is invested by Natixis' Captiva Capital Partners III.
Law firm Freshfields advised Natixis; Vichi Salesia Fagiolini & Associates acted for Emmelunga. Sphere: Related Content
Italy's furniture store chain Emmelunga has sold five of its stores in a sale-and-lease back deal with Mercurio Retail Properties for around EUR 50 mln. The stores, which are located in Italy's Tuscany and Lazio regions, represent the first acquisition made by Mercurio Retail Properties, a fund managed by CB Richard Ellis Investors. The fund is dedicated to institutional investors and is invested by Natixis' Captiva Capital Partners III.
Law firm Freshfields advised Natixis; Vichi Salesia Fagiolini & Associates acted for Emmelunga. Sphere: Related Content
Arcandor Enters €4.56 Billion Sale Leaseback of German Highstreet Department Store Portfolio
PropertyEU - March 19, 2008
A consortium of Deutsche Bank's RREEF funds, Milan-based Pirelli Real Estate, Generali and the Borletti Group has signed a binding agreement with Arcandor (former KarstadtQuelle) to acquire a 49% stake in Arcandor's Highstreet portfolio. Goldman Sachs' Whitehall Funds retains its remaining 51% interest in the German department store portfolio.
Italian insurance giant Generali has joined the RREEF-led consortium and has a 22.34% stake in the investment via its SICAV fund, Generali Real Estate Fund (GREF). Pirelli RE has a 24.66% share of the investment, while RREEF has approximately 49% and Borletti around 4%. Market rumours said that the consortium is paying more than €500mln in cash for Highstreet, but the price could be adjusted with the closing of the deal expected by the end of May. The consortium is also assuming €3.5 bn of debt secured against Highstreet’s properties.
The transaction values the entire portfolio, consisting of 164 properties and a total leasable area of 2.1 million m2, at €4.56bn. The consortium has also signed a binding agreement with Whitehall for a joint control and joint management of Highstreet. Pirelli RE will act as asset manager for the portfolio, jointly with Whitehall. The transaction is subject to regulatory and antitrust approval, as well as obtaining consent from existing lenders in connection with the change of control of the borrowers.
In a separate statement, Arcandor said that the total value of the Highstreet deal and a separate contractual agreement with the previous joint venture partner Whitehall comes to about €800mln. The Essen-based company will lease back the properties from the new owners.
Arcandor set up the Highstreet investment company two years ago and sold a majority stake to Goldman Sachs for a cash payment of €3.7bn. In December it announced it had signed a letter of intent with the RREEF-led consortium regarding the sale of the portfolio. The German retail group also said it was working together with joint venture 'to create a unique European department store portfolio'. Arcandor added it was seeking to buy a stake of up to 25% of the Italian department store chains La Rinascente and the French Printemps, in exchange for a 25% interest in its premium segment to be transferred to the consortium. Sphere: Related Content
A consortium of Deutsche Bank's RREEF funds, Milan-based Pirelli Real Estate, Generali and the Borletti Group has signed a binding agreement with Arcandor (former KarstadtQuelle) to acquire a 49% stake in Arcandor's Highstreet portfolio. Goldman Sachs' Whitehall Funds retains its remaining 51% interest in the German department store portfolio.
Italian insurance giant Generali has joined the RREEF-led consortium and has a 22.34% stake in the investment via its SICAV fund, Generali Real Estate Fund (GREF). Pirelli RE has a 24.66% share of the investment, while RREEF has approximately 49% and Borletti around 4%. Market rumours said that the consortium is paying more than €500mln in cash for Highstreet, but the price could be adjusted with the closing of the deal expected by the end of May. The consortium is also assuming €3.5 bn of debt secured against Highstreet’s properties.
The transaction values the entire portfolio, consisting of 164 properties and a total leasable area of 2.1 million m2, at €4.56bn. The consortium has also signed a binding agreement with Whitehall for a joint control and joint management of Highstreet. Pirelli RE will act as asset manager for the portfolio, jointly with Whitehall. The transaction is subject to regulatory and antitrust approval, as well as obtaining consent from existing lenders in connection with the change of control of the borrowers.
In a separate statement, Arcandor said that the total value of the Highstreet deal and a separate contractual agreement with the previous joint venture partner Whitehall comes to about €800mln. The Essen-based company will lease back the properties from the new owners.
Arcandor set up the Highstreet investment company two years ago and sold a majority stake to Goldman Sachs for a cash payment of €3.7bn. In December it announced it had signed a letter of intent with the RREEF-led consortium regarding the sale of the portfolio. The German retail group also said it was working together with joint venture 'to create a unique European department store portfolio'. Arcandor added it was seeking to buy a stake of up to 25% of the Italian department store chains La Rinascente and the French Printemps, in exchange for a 25% interest in its premium segment to be transferred to the consortium. Sphere: Related Content
Fletcher Seeks Sale Leasback of 23 Hotels in the Netherlands
PropertyEU - February 29, 2008
Fletcher Hotel Group, a subsidiary of the Hotel Management Group, said on Friday it has hired UK broker HVS Hodges Ward Elliot for the sale of its two and three-star hotel portfolio in the Netherlands. Fletcher, based in Vianen, said it plans to sell 23 of the 28 hotels it owns in the country through a sale-and-lease-back deal.
The group said that the move is aimed at funding its expansion strategy. Over the last four years, Fletcher has boosted its turnover by 40% thanks to 'autonomous growth and M&A activities'. The hotel chain is targeting a portfolio of 50 hotels in the Netherlands.
The portfolio comprises well-known assets such as Hotel Duinoord in Wassenaaar, De Malle Jan in Vierhouten, Hotel Erica in Berg en Dal and the largest hotel in Waddeneilanden, d’Amelander Kaap. Fletcher plans to lease back the hotels for a total EUR 7 mln per year.
London-based services firm HVS Hodges Ward Elliot has acted in several transactions in the Netherlands such as the sale of the SAS Radisson Hotel at Schiphol, and the Holiday Inn in Eindhoven. Sphere: Related Content
Fletcher Hotel Group, a subsidiary of the Hotel Management Group, said on Friday it has hired UK broker HVS Hodges Ward Elliot for the sale of its two and three-star hotel portfolio in the Netherlands. Fletcher, based in Vianen, said it plans to sell 23 of the 28 hotels it owns in the country through a sale-and-lease-back deal.
The group said that the move is aimed at funding its expansion strategy. Over the last four years, Fletcher has boosted its turnover by 40% thanks to 'autonomous growth and M&A activities'. The hotel chain is targeting a portfolio of 50 hotels in the Netherlands.
The portfolio comprises well-known assets such as Hotel Duinoord in Wassenaaar, De Malle Jan in Vierhouten, Hotel Erica in Berg en Dal and the largest hotel in Waddeneilanden, d’Amelander Kaap. Fletcher plans to lease back the hotels for a total EUR 7 mln per year.
London-based services firm HVS Hodges Ward Elliot has acted in several transactions in the Netherlands such as the sale of the SAS Radisson Hotel at Schiphol, and the Holiday Inn in Eindhoven. Sphere: Related Content
German State of Hesse Resumes EUR 400 Million Sale Leaseback of 35 Public Buildings
PropertyEU - July 7, 2008
The German state of Hesse is putting the Leo III property portfolio back on the market, Minister of Finance Karlheinz Weimar (CDU) told newspaper Financial Times Deutschland (FTD). Weimar said that the sale process has been resumed and that a deal is expected by the end of 2008. The German state aims to fetch about EUR 400mln for the portfolio, which consists of 35 public buildings. According to the FTD, the assets generate a net rent of about EUR 25mln. HSH Real Estate and Atisreal have been appointed to market the portfolio.
The German state initially put the assets on the market last year, but eventually halted attempts to arrange a sale and leaseback of the portfolio because the ongoing turbulence in the financial markets had left potential buyers unwilling or unable to meet the asking price of around EUR 400mln.
In November 2006, Austrian real estate company CA Immo acquired the Leo II portfolio from Hesse for about EUR 770mln in a sale-and-leaseback operation. The portfolio comprised 36 state-owned properties and 170 homes. Sphere: Related Content
The German state of Hesse is putting the Leo III property portfolio back on the market, Minister of Finance Karlheinz Weimar (CDU) told newspaper Financial Times Deutschland (FTD). Weimar said that the sale process has been resumed and that a deal is expected by the end of 2008. The German state aims to fetch about EUR 400mln for the portfolio, which consists of 35 public buildings. According to the FTD, the assets generate a net rent of about EUR 25mln. HSH Real Estate and Atisreal have been appointed to market the portfolio.
The German state initially put the assets on the market last year, but eventually halted attempts to arrange a sale and leaseback of the portfolio because the ongoing turbulence in the financial markets had left potential buyers unwilling or unable to meet the asking price of around EUR 400mln.
In November 2006, Austrian real estate company CA Immo acquired the Leo II portfolio from Hesse for about EUR 770mln in a sale-and-leaseback operation. The portfolio comprised 36 state-owned properties and 170 homes. Sphere: Related Content
Net Leased Travelodge Hotel In London Trades at 6% Yield
Property Week - February 20, 2008
A consortium of private investors this week bought a Travelodge hotel in the City of London with 70% leverage.
The consortium of around 10 wealthy investors – seven of which are east African and three of which are UK based – was led by investment manager Aprirose Real Estate. It paid around £25m to Lenta Properties for the 45,000 sq ft, 190-bedroom hotel near Tower Hill at Lloyds Court in the City, which is let to Travelodge on a 35-year lease with upward-only rental increases lined to the Retail Prices Index.
Aprirose managed to secure 69.3% senior debt funding at an undisclosed rate for the purchase from a bank, thought to be Abbey, for the former office building on the back of the strength of Travelodge as a long-term covenant.
Manish Gudka, head of Aprirose, said: ‘We are led by what our investors want, and right now capital protection is the name of the game, so we are very much covenant-driven. ‘Our investors like long leases, guaranteed uplifts and strong covenants – and that is the model that this Travelodge fits. The fundamentals of the property, in terms of customer demand and the location, are strong,’ he said.
Mark Bruce-Lockhart, director at Phillips Lockhart, the agent acting for Aprirose, attributed the low 6% yield to the perceived resilience of the budget hotel sector in the downturn: ‘There are not many 35-year unbroken streams in central London, which pushed the yield down. The banks really liked this deal because it was long dated.
‘It shows that there is demand for the secure, long-dated income, purely because people are growing fed up with not earning any interest in the bank. ‘We are finding surprisingly good demand for small recession-resilient covenants like Tesco Express, Aldi and Lidl2, which Travelodge falls into.’
Contracts were exchanged before Christmas, but the deal did not complete until last week.
Lenta Properties was represented by Storeys:ssp. Sphere: Related Content
A consortium of private investors this week bought a Travelodge hotel in the City of London with 70% leverage.
The consortium of around 10 wealthy investors – seven of which are east African and three of which are UK based – was led by investment manager Aprirose Real Estate. It paid around £25m to Lenta Properties for the 45,000 sq ft, 190-bedroom hotel near Tower Hill at Lloyds Court in the City, which is let to Travelodge on a 35-year lease with upward-only rental increases lined to the Retail Prices Index.
Aprirose managed to secure 69.3% senior debt funding at an undisclosed rate for the purchase from a bank, thought to be Abbey, for the former office building on the back of the strength of Travelodge as a long-term covenant.
Manish Gudka, head of Aprirose, said: ‘We are led by what our investors want, and right now capital protection is the name of the game, so we are very much covenant-driven. ‘Our investors like long leases, guaranteed uplifts and strong covenants – and that is the model that this Travelodge fits. The fundamentals of the property, in terms of customer demand and the location, are strong,’ he said.
Mark Bruce-Lockhart, director at Phillips Lockhart, the agent acting for Aprirose, attributed the low 6% yield to the perceived resilience of the budget hotel sector in the downturn: ‘There are not many 35-year unbroken streams in central London, which pushed the yield down. The banks really liked this deal because it was long dated.
‘It shows that there is demand for the secure, long-dated income, purely because people are growing fed up with not earning any interest in the bank. ‘We are finding surprisingly good demand for small recession-resilient covenants like Tesco Express, Aldi and Lidl2, which Travelodge falls into.’
Contracts were exchanged before Christmas, but the deal did not complete until last week.
Lenta Properties was represented by Storeys:ssp. Sphere: Related Content
BBVA Nearing EUR 1 Billion Sale Leaseback of Properties Across Spain
Property Week - February 20, 2009
RREEF is close to sealing a €1bn purchase and leaseback of some of Spanish bank Banco Bilbao Vizcaya Argentaria’s (BBVA) property assets
It is thought the global fund manager is in advanced talks with BBVA to buy a portfolio of retail bank branches and offices across Spain. The bank would lease the properties back on a range of leases of more than 15 years.
BBVA instructed CB Richard Ellis last year to market its property assets to raise around €2bn.
Around 1,288 retail branches and 30 office buildings are among the property assets. BBVA has split the portfolio to attract a wider range of investors and has agreed to lease the properties on a range of terms between 25 years and 40 years.
It is thought that RREEF has cherry picked several assets in which it is interested and is discussing the possible structure for the deal. Sphere: Related Content
RREEF is close to sealing a €1bn purchase and leaseback of some of Spanish bank Banco Bilbao Vizcaya Argentaria’s (BBVA) property assets
It is thought the global fund manager is in advanced talks with BBVA to buy a portfolio of retail bank branches and offices across Spain. The bank would lease the properties back on a range of leases of more than 15 years.
BBVA instructed CB Richard Ellis last year to market its property assets to raise around €2bn.
Around 1,288 retail branches and 30 office buildings are among the property assets. BBVA has split the portfolio to attract a wider range of investors and has agreed to lease the properties on a range of terms between 25 years and 40 years.
It is thought that RREEF has cherry picked several assets in which it is interested and is discussing the possible structure for the deal. Sphere: Related Content
Sunday, February 15, 2009
Adidas AG Completes Sale Leaseback of Reebok-CCM’s HQ in Montréal
Jones Lang Lasalle Web Site - January, 2009
Jones Lang LaSalle Real Estate Services, on behalf of adidas AG, is pleased to announce the successful completion of a 15 year sale leaseback of the 475,000 s.f. worldwide headquarters and global distribution center of Reebok-CCM Hockey. This state of the art distribution facility located in Ville St. Laurent, Montréal, Québec, Canada was constructed in 2006 as a mixed industrial and office space building. The property sits on over 885,000 s.f. of land and boasts 71,512 s.f. of office and showroom space, and an impressive 402,951 s.f. of warehousing area at a clear height of 33.5 ft.
The property is 100% leased to Reebok-CCM for 15 years, on an absolute net lease basis.
Adidas AG, the world’s second largest sporting goods company, whose global portfolio encompasses distribution, office and retail space, has already appointed Jones Lang LaSalle on over 50 projects worldwide involving transaction management, property development, capital markets and lease administration.
John Faratro, Senior Vice President, Jones Lang LaSalle says, “our strong track record in Industrial Services and ability to deliver key expertise through our established network of local markets was integral to a successful disposition.” Sphere: Related Content
Jones Lang LaSalle Real Estate Services, on behalf of adidas AG, is pleased to announce the successful completion of a 15 year sale leaseback of the 475,000 s.f. worldwide headquarters and global distribution center of Reebok-CCM Hockey. This state of the art distribution facility located in Ville St. Laurent, Montréal, Québec, Canada was constructed in 2006 as a mixed industrial and office space building. The property sits on over 885,000 s.f. of land and boasts 71,512 s.f. of office and showroom space, and an impressive 402,951 s.f. of warehousing area at a clear height of 33.5 ft.
The property is 100% leased to Reebok-CCM for 15 years, on an absolute net lease basis.
Adidas AG, the world’s second largest sporting goods company, whose global portfolio encompasses distribution, office and retail space, has already appointed Jones Lang LaSalle on over 50 projects worldwide involving transaction management, property development, capital markets and lease administration.
John Faratro, Senior Vice President, Jones Lang LaSalle says, “our strong track record in Industrial Services and ability to deliver key expertise through our established network of local markets was integral to a successful disposition.” Sphere: Related Content
BBVA Completes €82 Million Sale Leaseback of Madrid HQ
Property Week - February 13, 2009
Deka has bought the Madrid headquarters of Spanish bank Banco Bilbao Vizcaya Argentaria (BBVA) for around €82m in a purchase and leaseback. The German open-ended fund manager is thought to have agreed to lease the building back to the bank for 15 years. The rent has not been disclosed.
The sale is part of a wider disposal of assets by BBVA. Last year it instructed CB Richard Ellis to advise on raising around €2bn through sale and leasebacks. It is thought to have assembled two main portfolios comprising around 1,288 retail branches and 30 office buildings respectively. It split the portfolio to attract a wider range of investors and has agreed to lease the properties on a range of terms between 25 years and 40 years.
In the last six months of 2008, nearly €4bn of Spanish bank properties were put up for sale and leasebacks.
Colliers International advised Deka. All parties declined to comment. Sphere: Related Content
Deka has bought the Madrid headquarters of Spanish bank Banco Bilbao Vizcaya Argentaria (BBVA) for around €82m in a purchase and leaseback. The German open-ended fund manager is thought to have agreed to lease the building back to the bank for 15 years. The rent has not been disclosed.
The sale is part of a wider disposal of assets by BBVA. Last year it instructed CB Richard Ellis to advise on raising around €2bn through sale and leasebacks. It is thought to have assembled two main portfolios comprising around 1,288 retail branches and 30 office buildings respectively. It split the portfolio to attract a wider range of investors and has agreed to lease the properties on a range of terms between 25 years and 40 years.
In the last six months of 2008, nearly €4bn of Spanish bank properties were put up for sale and leasebacks.
Colliers International advised Deka. All parties declined to comment. Sphere: Related Content
Coates Seeking $15 Million Sale Leaseback of Seven Shops in West Australia
The West Australian - February 13,2009
The owners of Australia’s biggest equipment hire group, Coates Hire, are auctioning seven WA sites next month in the hope of reaping more than $15 million.
The Carlyle Group and Kerry Stokes’ National Hire Group, which bought out Coates Hire a year ago, are selling land in regional and metropolitan WA with properties in Kwinana, Port Hedland, Kalgoorlie, Newman, Tom Price, Kambalda and Collie.
Each of the properties will be leased back by Coates Hire on a 12-year lease, for rents ranging from $35,000 to $580,000 a year.
Colliers International industrial and commercial sales and leasing executive Greg O’Meara, who is handling the portfolio, said the sale was an opportunity for smaller investors to buy an industrial investment, in some cases for $300,000 to $400,000, with a blue-chip national tenant.
The three biggest properties, in Kwinana, Port Hedland and Kalgoorlie, would appeal to investors in the $5 million to $7 million range.
“The strength of the offering is the strong tenant,” Mr O’Meara said. “The properties by and large are in good industrial locations, in mining towns for the most part, and provide good cash flows. People are buying an income stream but they are also buying a piece of real estate. Self-funded retirees who have been hit by market uncertainty in recent months can look at getting an excellent return on their money.”
The seven properties will be auctioned on March 11. Sphere: Related Content
The owners of Australia’s biggest equipment hire group, Coates Hire, are auctioning seven WA sites next month in the hope of reaping more than $15 million.
The Carlyle Group and Kerry Stokes’ National Hire Group, which bought out Coates Hire a year ago, are selling land in regional and metropolitan WA with properties in Kwinana, Port Hedland, Kalgoorlie, Newman, Tom Price, Kambalda and Collie.
Each of the properties will be leased back by Coates Hire on a 12-year lease, for rents ranging from $35,000 to $580,000 a year.
Colliers International industrial and commercial sales and leasing executive Greg O’Meara, who is handling the portfolio, said the sale was an opportunity for smaller investors to buy an industrial investment, in some cases for $300,000 to $400,000, with a blue-chip national tenant.
The three biggest properties, in Kwinana, Port Hedland and Kalgoorlie, would appeal to investors in the $5 million to $7 million range.
“The strength of the offering is the strong tenant,” Mr O’Meara said. “The properties by and large are in good industrial locations, in mining towns for the most part, and provide good cash flows. People are buying an income stream but they are also buying a piece of real estate. Self-funded retirees who have been hit by market uncertainty in recent months can look at getting an excellent return on their money.”
The seven properties will be auctioned on March 11. Sphere: Related Content
Thursday, February 12, 2009
Mitchells & Butlers Completes £30 Million Sale Leaseback of HQ & Hotel in Birmingham
PropertyEU - February 9, 2009
London-based fund manager Moorfield Group has concluded a £30 mln (EUR 33.5 mln) sale-and-leaseback with leisure group Mitchells & Butlers for its 95,000 sq ft (8,826 m2) head office and adjoining 120-room hotel in Birmingham.
Moorfield has purchased the buildings for its Moorfield Real Estate Fund II which raised £400 mln of private equity on closing at the end of 2007. MREF II is backed principally by US endowment and foundation funds and European pension funds.
The hotel and office are on Fleet Street in Birmingham and the hotel is an Express by Holiday Inn. Both have been leased back to Mitchells & Butlers.
Colliers CRE acted for Mitchells & Butlers and Savills acted for Moorfield. Sphere: Related Content
London-based fund manager Moorfield Group has concluded a £30 mln (EUR 33.5 mln) sale-and-leaseback with leisure group Mitchells & Butlers for its 95,000 sq ft (8,826 m2) head office and adjoining 120-room hotel in Birmingham.
Moorfield has purchased the buildings for its Moorfield Real Estate Fund II which raised £400 mln of private equity on closing at the end of 2007. MREF II is backed principally by US endowment and foundation funds and European pension funds.
The hotel and office are on Fleet Street in Birmingham and the hotel is an Express by Holiday Inn. Both have been leased back to Mitchells & Butlers.
Colliers CRE acted for Mitchells & Butlers and Savills acted for Moorfield. Sphere: Related Content
Monday, February 02, 2009
DHL Enters EUR 30 Million Sale Leaseback of Three Logistics Properties in Belgium
PropertyEU - January 30, 2009
Warehousing group WDP has expanded its Belgian portfolio with the acquisition of three logistics sites from DHL's parent company Deutsche Post for a total of nearly EUR 30 mln. The all-share transaction reflects a gross yield of 8.7%. The sites, with a total area of 85,000 m2, will be leased back by DHL, WDP said on Thursday.
The transaction will take the form of a merger and three partial de-mergers whereby WDP will issue shares for an amount of nearly EUR 22 mln and will be transferred debt of EUR 8 mln. The deal is due for completion in the first quarter of 2009.
The assets consist of the Belgian 33,000 m2 head office of DHL Exel Supply Chain in Mechelen, a site of 33,923 m2 leased with a five- to nine-year contract and a 19,000 m2 site in Meer. The total rent amounts to EUR 2.7 mln per year. Sphere: Related Content
Warehousing group WDP has expanded its Belgian portfolio with the acquisition of three logistics sites from DHL's parent company Deutsche Post for a total of nearly EUR 30 mln. The all-share transaction reflects a gross yield of 8.7%. The sites, with a total area of 85,000 m2, will be leased back by DHL, WDP said on Thursday.
The transaction will take the form of a merger and three partial de-mergers whereby WDP will issue shares for an amount of nearly EUR 22 mln and will be transferred debt of EUR 8 mln. The deal is due for completion in the first quarter of 2009.
The assets consist of the Belgian 33,000 m2 head office of DHL Exel Supply Chain in Mechelen, a site of 33,923 m2 leased with a five- to nine-year contract and a 19,000 m2 site in Meer. The total rent amounts to EUR 2.7 mln per year. Sphere: Related Content
Sunday, February 01, 2009
Home Depot Completes $59.2 Million Sale Leaseback of Two Distribution Centers
CoStar Group - January 27, 2009
Home Depot sold two distribution centers in Alabama and Georgia to The Inland Real Estate Group of Cos. Inc. for $59.2 million, or approximately $45 per square foot. The Atlanta-based home improvement retailer also leased back the nearly 1.32 million square feet in industrial space for 18 years.
Inland said the buildings, known as rapid deployment centers, are key hubs in Home Depot’s supply chain.
The one-year-old facilities each measure 657,600 square feet. The first is at 6400 Jefferson Metropolitan Parkway in McCalla, AL, about 20 miles southwest of Birmingham. The second one is just outside of Valdosta, GA, at 6201 Peterson Road in Lake Park. It’s nearly five miles from the Florida state line and about two hours northeast of Tallahassee.
CB Richard Ellis represented Home Depot. Inland used in-house representation. Sphere: Related Content
Home Depot sold two distribution centers in Alabama and Georgia to The Inland Real Estate Group of Cos. Inc. for $59.2 million, or approximately $45 per square foot. The Atlanta-based home improvement retailer also leased back the nearly 1.32 million square feet in industrial space for 18 years.
Inland said the buildings, known as rapid deployment centers, are key hubs in Home Depot’s supply chain.
The one-year-old facilities each measure 657,600 square feet. The first is at 6400 Jefferson Metropolitan Parkway in McCalla, AL, about 20 miles southwest of Birmingham. The second one is just outside of Valdosta, GA, at 6201 Peterson Road in Lake Park. It’s nearly five miles from the Florida state line and about two hours northeast of Tallahassee.
CB Richard Ellis represented Home Depot. Inland used in-house representation. Sphere: Related Content
Saturday, January 24, 2009
Sale Leasebacks Revived as Companies Look for Cash
Property Week - January 22, 2009
Big-name owner-occupiers attempt to raise capital from property portfolios
A host of the world’s biggest companies are turning to their property portfolios in an attempt to raise cash to shore up their declining balance sheets.
Property Week understands that builders’ merchant Travis Perkins and communications company Cable & Wireless are investigating ways to raise capital from their properties.
The potential is huge, predicts GVA Grimley, which estimated in spring 2008 that the value of freehold properties held on the FTSE 200 companies’ balance sheets totalled £163bn.
Julian Lyon, chairman of the Confederation of British Industry’s property group and manager of European real estate at General Motors, said: ‘All companies must keep under constant review how they raise working capital. ‘Several options for raising capital have disappeared, so companies have to look at alternatives.’
Rumours have swept the market that other corporate occupiers such as Credit Suisse, builders’ supplier Wolseley and Honda may be considering sale and leasebacks. They would follow General Motors, which, advised by Jones Lang LaSalle, put $750m (£536m) of sale-and-leasebacks properties on the market at the end of last year, including its Detroit headquarters, the Renaissance Center.
Matthew Richards, director of corporate capital markets at JLL, said enquiries of this type had doubled over the last six months.
However, most companies are at early stages in their investigations. Cable & Wireless, which is advised by Doherty Baines, has a small portfolio of technical sale-and-leaseback properties on the market.
Credit Suisse reviews its freehold property every six months and is thought to be considering the sale-and-leaseback option for the future.
Wolseley was unavailable for comment.
Honda’s property manager, Gordon Hunt, said it was not yet the right time.
‘We are not looking at sale and leasebacks as it doesn’t appeal to us because of a simple commercial reason: the yields are not where they need to be.’
Hunt’s comments demonstrate a crucial point: that some owner-occupiers only consider them when they are desperate for cash, but others, such as Tesco and Travis Perkins, have long pursued them as a sensible business initiative.
Property director of Travis Perkins, Martin Meech, who has a sale and leaseback portfolio on the market, said: ‘Sale and leasebacks are part of an ongoing portfolio strategy for us.’
Tom Betts, finance director at Topland, which has invested in several sale-and-leaseback transactions in the past, agreed and said: ‘We are seeing a few things in their infancy at the moment. But it should not just be cash-raising to sort a problem.
We are a long-term investor and we want someone who is going to be there for the long term. Sphere: Related Content
Big-name owner-occupiers attempt to raise capital from property portfolios
A host of the world’s biggest companies are turning to their property portfolios in an attempt to raise cash to shore up their declining balance sheets.
Property Week understands that builders’ merchant Travis Perkins and communications company Cable & Wireless are investigating ways to raise capital from their properties.
The potential is huge, predicts GVA Grimley, which estimated in spring 2008 that the value of freehold properties held on the FTSE 200 companies’ balance sheets totalled £163bn.
Julian Lyon, chairman of the Confederation of British Industry’s property group and manager of European real estate at General Motors, said: ‘All companies must keep under constant review how they raise working capital. ‘Several options for raising capital have disappeared, so companies have to look at alternatives.’
Rumours have swept the market that other corporate occupiers such as Credit Suisse, builders’ supplier Wolseley and Honda may be considering sale and leasebacks. They would follow General Motors, which, advised by Jones Lang LaSalle, put $750m (£536m) of sale-and-leasebacks properties on the market at the end of last year, including its Detroit headquarters, the Renaissance Center.
Matthew Richards, director of corporate capital markets at JLL, said enquiries of this type had doubled over the last six months.
However, most companies are at early stages in their investigations. Cable & Wireless, which is advised by Doherty Baines, has a small portfolio of technical sale-and-leaseback properties on the market.
Credit Suisse reviews its freehold property every six months and is thought to be considering the sale-and-leaseback option for the future.
Wolseley was unavailable for comment.
Honda’s property manager, Gordon Hunt, said it was not yet the right time.
‘We are not looking at sale and leasebacks as it doesn’t appeal to us because of a simple commercial reason: the yields are not where they need to be.’
Hunt’s comments demonstrate a crucial point: that some owner-occupiers only consider them when they are desperate for cash, but others, such as Tesco and Travis Perkins, have long pursued them as a sensible business initiative.
Property director of Travis Perkins, Martin Meech, who has a sale and leaseback portfolio on the market, said: ‘Sale and leasebacks are part of an ongoing portfolio strategy for us.’
Tom Betts, finance director at Topland, which has invested in several sale-and-leaseback transactions in the past, agreed and said: ‘We are seeing a few things in their infancy at the moment. But it should not just be cash-raising to sort a problem.
We are a long-term investor and we want someone who is going to be there for the long term. Sphere: Related Content
Sunday, January 18, 2009
Atos Origin Completes EUR 28 Million Sale Leaseback of Offices in Madrid
PropertyEU - January 16, 2009
Germany's Real I.S. said it has acquired a property in the Julian Camarillo office district of Madrid in a EUR 28 mln sale and leaseback with IT company Firma Atos Origin. The asset is earmarked for the institutional investment fund BGV Bayerische Grundvermögen III SICAV FIS. The four-storey building has a rentable surface of 8,000 m2, and an underground parking garage with 92 spaces. The property is fully leased.
Real I.S. is the Munich-based subsidiary of Bayern LB. This is the fifth investment made by the company on behalf of its institutional fund. Sphere: Related Content
Germany's Real I.S. said it has acquired a property in the Julian Camarillo office district of Madrid in a EUR 28 mln sale and leaseback with IT company Firma Atos Origin. The asset is earmarked for the institutional investment fund BGV Bayerische Grundvermögen III SICAV FIS. The four-storey building has a rentable surface of 8,000 m2, and an underground parking garage with 92 spaces. The property is fully leased.
Real I.S. is the Munich-based subsidiary of Bayern LB. This is the fifth investment made by the company on behalf of its institutional fund. Sphere: Related Content
Monday, January 12, 2009
Tesco Completes £308 Million Sale Leaseback of Seven Stores
Property Week - January 9, 2009
Tesco has completed another two sale and leasebacks totalling £308m. It has sold three Tesco stores into a £199m joint venture with the separately run Tesco Pension Scheme. The pension scheme will take a 50% stake. A further four stores will be sold to a Prupim annuity fund client in a £109m sale and leaseback. The initial yields on all the transactions are 5.25%-5.3%. Prupim and GL Hearn advised the Prupim fund; Morgan Williams advised Tesco on both transactions; Cushman & Wakefield advised the Tesco Pension Fund. Sphere: Related Content
Tesco has completed another two sale and leasebacks totalling £308m. It has sold three Tesco stores into a £199m joint venture with the separately run Tesco Pension Scheme. The pension scheme will take a 50% stake. A further four stores will be sold to a Prupim annuity fund client in a £109m sale and leaseback. The initial yields on all the transactions are 5.25%-5.3%. Prupim and GL Hearn advised the Prupim fund; Morgan Williams advised Tesco on both transactions; Cushman & Wakefield advised the Tesco Pension Fund. Sphere: Related Content
Telereal to Buy Trillium for £750 Million
PropertyEU - January 9, 2009
London-based property investment and services firm Telereal has agreed to acquire Land Securities' outsourcing business Trillium for £750 mln (about EUR 831 mln).
The investment volume is considerably lower than the £1 bn-plus valuations of Trillium in 2007-2008. But the deal does not include Trillium's Accor hotel portfolio which will remain within Land Securities.
In a statement, Land Securities said the headline enterprise value of £750 mln was based on Trillium's balance sheet - excluding the Accor hotels - at end-March 2008. The gross assets of Trillium (excluding Accor) were £1.57 bn end-March 2008 and £1.3 bn at end-September 2008. The sale of Trillium is expected to complete on 12 January.
Land Securities, the largest real estate investment trust in the UK, unveiled plans back in November 2007 to demerge into two separate listed companies for retail property and the London office portfolio. The group planned either to sell Trillium, or failing that list it as a separate entity. However, the worsening of the global financial crisis stymied the re-organisation, with the sales process for Trillium taking much longer than expected. Land Securities suspended the demerger plans for its retail and office divisions in November last year.
The UK REIT said on Thursday that the sale of Trillium will generate cash proceeds of £444 mln which will be used to reduce the group's net debt.
Francis Salway, CEO of Land Securities, said: 'We are pleased to have concluded this sale in a challenging economic environment. We will now focus on our core property investment and development activities. The cash proceeds will strengthen our balance she" Sphere: Related Content
London-based property investment and services firm Telereal has agreed to acquire Land Securities' outsourcing business Trillium for £750 mln (about EUR 831 mln).
The investment volume is considerably lower than the £1 bn-plus valuations of Trillium in 2007-2008. But the deal does not include Trillium's Accor hotel portfolio which will remain within Land Securities.
In a statement, Land Securities said the headline enterprise value of £750 mln was based on Trillium's balance sheet - excluding the Accor hotels - at end-March 2008. The gross assets of Trillium (excluding Accor) were £1.57 bn end-March 2008 and £1.3 bn at end-September 2008. The sale of Trillium is expected to complete on 12 January.
Land Securities, the largest real estate investment trust in the UK, unveiled plans back in November 2007 to demerge into two separate listed companies for retail property and the London office portfolio. The group planned either to sell Trillium, or failing that list it as a separate entity. However, the worsening of the global financial crisis stymied the re-organisation, with the sales process for Trillium taking much longer than expected. Land Securities suspended the demerger plans for its retail and office divisions in November last year.
The UK REIT said on Thursday that the sale of Trillium will generate cash proceeds of £444 mln which will be used to reduce the group's net debt.
Francis Salway, CEO of Land Securities, said: 'We are pleased to have concluded this sale in a challenging economic environment. We will now focus on our core property investment and development activities. The cash proceeds will strengthen our balance she" Sphere: Related Content
Thursday, January 08, 2009
UniCredit Completes €800 Million Sale Leaseback of Milan HQ and 70 Bank Branches Across Italy
Property Week - January 6, 2009
Italian bank UniCredit has packaged a portfolio of domestic real estate, including its Milan headquarters, into a fund and sold 62% of the units to institutional investors.
The fifteen year investment fund, managed by Italian real estate manager Fimit, comprises a portfolio of the bank’s historic Palazzo Broggi building in the heart of Milan (pictured) and Livio Cambi in the city, as well as 70 banking branches and has an overall value of €800m.
UniCredit, which will lease the properties back for 18 years, will keep a 33% stake in the remaining fund units and sell a further 5% by February.
Italy’s second largest bank is under to pressure to boost its core tier one capital ratio – a key measure of balance sheet strength – to 6.7% before the end of the year.
The deal is expected to yield UniCredit a €280m profit for the fourth quarter of 2008. In the three months to September, net profit at the bank fell 54% to €551m compared with the same period last year, but beat market forecasts of €425m.
The sale is one of three disposals worth just over €2bn for the bank. It has also raised €1bn from the sale of profit sharing rights by UniCredit’s Bank Austria for €1.1bn and a stake in Atlantia, an Italian highway tolls operator, for €248m.
In October UniCredit said it needed to raise €6.6bn in additional capital through scrapping its cash dividend and tapping shareholders for extra cash. Sphere: Related Content
Italian bank UniCredit has packaged a portfolio of domestic real estate, including its Milan headquarters, into a fund and sold 62% of the units to institutional investors.
The fifteen year investment fund, managed by Italian real estate manager Fimit, comprises a portfolio of the bank’s historic Palazzo Broggi building in the heart of Milan (pictured) and Livio Cambi in the city, as well as 70 banking branches and has an overall value of €800m.
UniCredit, which will lease the properties back for 18 years, will keep a 33% stake in the remaining fund units and sell a further 5% by February.
Italy’s second largest bank is under to pressure to boost its core tier one capital ratio – a key measure of balance sheet strength – to 6.7% before the end of the year.
The deal is expected to yield UniCredit a €280m profit for the fourth quarter of 2008. In the three months to September, net profit at the bank fell 54% to €551m compared with the same period last year, but beat market forecasts of €425m.
The sale is one of three disposals worth just over €2bn for the bank. It has also raised €1bn from the sale of profit sharing rights by UniCredit’s Bank Austria for €1.1bn and a stake in Atlantia, an Italian highway tolls operator, for €248m.
In October UniCredit said it needed to raise €6.6bn in additional capital through scrapping its cash dividend and tapping shareholders for extra cash. Sphere: Related Content
Marsans Completes €115 Million Sale Leaseback of Madrid HQ
Iberian Lawyer - January 6, 2009
UrÃa Menéndez has advised Grupo Marsans in the sale and leaseback of its headquarters in the emblematic "Edificio Pórtico" in Campo de las Naciones in Madrid.
The transaction consisted of the sale of the property for approximately €115 million to the German investment fund Union Investment Real Estate (UIRE), and the subrogation of the purchaser to the mortgage loan granted by Eurohypo for the building’s original acquisition.
A lease agreement for the entire premises was entered into simultaneously to the formalising of the sale and purchase deed, with the vendor thus becoming the lessee. The initial term of the lease is eight years, the lessee being entitled to extend this term for two additional successive periods of three years each.
UrÃa Menéndez’s team included Diego Armero, Maria Luisa Vara, Pablo Garrote and Francisco Bengoetxea (real estate); Carlos López Quiroga (transport); and Guillermo Canalejo and Francisco de la Puente (tax).
UIRE was advised by Gómez-Acebo & Pombo and Eurohypo by its own in-house lawyers. Sphere: Related Content
UrÃa Menéndez has advised Grupo Marsans in the sale and leaseback of its headquarters in the emblematic "Edificio Pórtico" in Campo de las Naciones in Madrid.
The transaction consisted of the sale of the property for approximately €115 million to the German investment fund Union Investment Real Estate (UIRE), and the subrogation of the purchaser to the mortgage loan granted by Eurohypo for the building’s original acquisition.
A lease agreement for the entire premises was entered into simultaneously to the formalising of the sale and purchase deed, with the vendor thus becoming the lessee. The initial term of the lease is eight years, the lessee being entitled to extend this term for two additional successive periods of three years each.
UrÃa Menéndez’s team included Diego Armero, Maria Luisa Vara, Pablo Garrote and Francisco Bengoetxea (real estate); Carlos López Quiroga (transport); and Guillermo Canalejo and Francisco de la Puente (tax).
UIRE was advised by Gómez-Acebo & Pombo and Eurohypo by its own in-house lawyers. Sphere: Related Content
Monday, December 22, 2008
Spanish Savings Bank CAM Enters EUR 63 Million Sale Leaseback of Three Office Buildings in Spain
PropertyEU - December 18, 2008
The employee pension fund of Spain's savings bank Caja de Ahorros del Mediterraneo (CAM) has acquired three office buildings from the bank for EUR 63 mln. The assets are located in Alicante, Valencia and Barcelona, and have been leased back to CAM for a period of 20 years with an option to extend for a further 10 years.
The fund said this sale-and-leaseback transaction is expected to 'give more stability to its real estate portfolio, as it provides a stable income stream which is less subject to market volatility. Sphere: Related Content
The employee pension fund of Spain's savings bank Caja de Ahorros del Mediterraneo (CAM) has acquired three office buildings from the bank for EUR 63 mln. The assets are located in Alicante, Valencia and Barcelona, and have been leased back to CAM for a period of 20 years with an option to extend for a further 10 years.
The fund said this sale-and-leaseback transaction is expected to 'give more stability to its real estate portfolio, as it provides a stable income stream which is less subject to market volatility. Sphere: Related Content
Tuesday, December 16, 2008
Caixa Catalunya Seeking EUR 500 Million Sale Leaseback of 824 Bank Branches Across Spain
Reuters - December 14, 2008
Spanish savings bank Caixa Catalunya is seeking to sell 824 of its 1,200 buildings in Spain in a bid to raise 500 million euros ($663.4 million), La Vanguardia reported on Sunday, citing sources at the bank.The bank wants to strike a deal with potential buyers to continue to rent the branches, with a buy-back option for 10, 15 and 20 years, and wants to sell them in lots of 5 million euros, which would include 10 to 15 premises, the paper said.
The bank is in particular targeting its private banking clients as potential buyers, it added.
Its head office in Barcelona is not up for sale, added the report. No one was immediately available at the bank on Sunday to comment.
Other Spanish banks have also closed leaseback deals on their property, notably Spain's largest bank Santander (SAN.MC), which has sold more than 1,150 of its branches and other buildings and its headquarters complex at Boadilla del Monte on the outskirts of Madrid. Sphere: Related Content
Spanish savings bank Caixa Catalunya is seeking to sell 824 of its 1,200 buildings in Spain in a bid to raise 500 million euros ($663.4 million), La Vanguardia reported on Sunday, citing sources at the bank.The bank wants to strike a deal with potential buyers to continue to rent the branches, with a buy-back option for 10, 15 and 20 years, and wants to sell them in lots of 5 million euros, which would include 10 to 15 premises, the paper said.
The bank is in particular targeting its private banking clients as potential buyers, it added.
Its head office in Barcelona is not up for sale, added the report. No one was immediately available at the bank on Sunday to comment.
Other Spanish banks have also closed leaseback deals on their property, notably Spain's largest bank Santander (SAN.MC), which has sold more than 1,150 of its branches and other buildings and its headquarters complex at Boadilla del Monte on the outskirts of Madrid. Sphere: Related Content
Sunday, December 14, 2008
Tesco Pursuing €212 Million Sale Leaseback of Six Properties in Ireland
Property Week - December 12, 2008
Tesco plans to sell properties in the Republic of Ireland worth €212m (£184m), including shopping centres Golden Island in Athlone and Artane Castle, Artane, north Dublin.
It is looking for €60m (£52m) for Golden Island, which would reflect a net initial yield of 6.15%, and €35m (£30m) for Artane Castle – a yield of more than 6%.
DTZ Sherry FitzGerald is quoting €116.9m (£101m) for a sale and leaseback of four other stores. Sphere: Related Content
Tesco plans to sell properties in the Republic of Ireland worth €212m (£184m), including shopping centres Golden Island in Athlone and Artane Castle, Artane, north Dublin.
It is looking for €60m (£52m) for Golden Island, which would reflect a net initial yield of 6.15%, and €35m (£30m) for Artane Castle – a yield of more than 6%.
DTZ Sherry FitzGerald is quoting €116.9m (£101m) for a sale and leaseback of four other stores. Sphere: Related Content
Sunday, December 07, 2008
European Banks Look to Sale Leasebacks for Liquidity Amid Tight Capital Markets
Property Week - December 5, 2008
European banks have embarked on a slew of sale and leasebacks in an attempt to raise cash amid the global economic turmoil.
Collapsed Belgian bank Fortis, BBVA and Banco Sabadell have all put portfolios on the market.
Almost every other top European bank, from Italy’s UniCredito to Royal Bank of Scotland in the UK, is also scrutinising its property holdings to see where money can be made.
A report by Merrill Lynch found that Europe’s leading banks need to raise a further €73bn (£61bn) to keep their finances steady.
Cushman & Wakefield found that the top 43 European banks have €63bn (£52bn) of property assets on their balance sheets (see table).
Matthew Stone, head of occupier strategy at Cushman & Wakefield, said: ‘One increasingly popular method for banks to raise capital is through sale and leasebacks. The Spanish banks, BBVA and Banco Sabadell, and Fortis of Belgium, have all recently announced plans for billions of euros of sale and leaseback transactions, and many other European banks are actively considering them as a cost-efficient method of raising finance.
‘Leading European banks have over €63bn of land and buildings on their balance sheets which, if fully monetised, would meet almost all the €73bn of additional capital needs estimated by Merrill Lynch.’
There are investors willing to buy this kind of property. The fact that some banks have been bailed out by governments provides reassurance that they are safe from insolvency and are good covenants. Sphere: Related Content
European banks have embarked on a slew of sale and leasebacks in an attempt to raise cash amid the global economic turmoil.
Collapsed Belgian bank Fortis, BBVA and Banco Sabadell have all put portfolios on the market.
Almost every other top European bank, from Italy’s UniCredito to Royal Bank of Scotland in the UK, is also scrutinising its property holdings to see where money can be made.
A report by Merrill Lynch found that Europe’s leading banks need to raise a further €73bn (£61bn) to keep their finances steady.
Cushman & Wakefield found that the top 43 European banks have €63bn (£52bn) of property assets on their balance sheets (see table).
Matthew Stone, head of occupier strategy at Cushman & Wakefield, said: ‘One increasingly popular method for banks to raise capital is through sale and leasebacks. The Spanish banks, BBVA and Banco Sabadell, and Fortis of Belgium, have all recently announced plans for billions of euros of sale and leaseback transactions, and many other European banks are actively considering them as a cost-efficient method of raising finance.
‘Leading European banks have over €63bn of land and buildings on their balance sheets which, if fully monetised, would meet almost all the €73bn of additional capital needs estimated by Merrill Lynch.’
There are investors willing to buy this kind of property. The fact that some banks have been bailed out by governments provides reassurance that they are safe from insolvency and are good covenants. Sphere: Related Content
Wednesday, December 03, 2008
Renown Agrees to $89.3 Million Sale Leaseback of Two Properties in Japan
Trading Markets.com - December 1, 2008
Japan's Renown Inc. (TSE:3606) said Friday that it will sell its headquarters building in Tokyo and an office building in Osaka for a total of 8.5 billion yen (US$89.3 million). The apparel company, which is undergoing rehabilitation, plans to use the proceeds to reduce interest-bearing debt and renovate stores.
Renown will sell the Tokyo property to building-leasing firm TOC CO. (8841) for 6 billion yen and the Osaka property to condominium builder Haseko Corp. (TSE:1808) for 2.5 billion yen.
It will sign lease contracts with the buyers and continue using the buildings. Sphere: Related Content
Japan's Renown Inc. (TSE:3606) said Friday that it will sell its headquarters building in Tokyo and an office building in Osaka for a total of 8.5 billion yen (US$89.3 million). The apparel company, which is undergoing rehabilitation, plans to use the proceeds to reduce interest-bearing debt and renovate stores.
Renown will sell the Tokyo property to building-leasing firm TOC CO. (8841) for 6 billion yen and the Osaka property to condominium builder Haseko Corp. (TSE:1808) for 2.5 billion yen.
It will sign lease contracts with the buyers and continue using the buildings. Sphere: Related Content
Tuesday, December 02, 2008
Dearth of Financing Slows Sale Leasebacks
Financial Week - November 30, 2008
The credit crunch is killing the trend of using sale-leasebacks to raise capital, because frozen conditions have made it nearly impossible to get deals done.
Through Nov. 1, sale-leasebacks totaled $6.2 billion, less than half of the $14.2 billion in such transactions seen during 2007, according to Real Capital Analytics. Most of the deals that do close are one-off, single-tenant transactions amounting to less than $100 million each, experts say, a change from the large portfolio deals that dominated the market in years past.
From 2002 through 2007, sale-leasebacks gained popularity with private equity firms, which sold real estate assets from acquisitions to pay off the loans used to bankroll their leveraged buyouts. Having less invested capital increased PE firms’ net returns on assets and equity.
But few other corporations saw the need for them because the liberal lending atmosphere made capital promptly and cheaply obtainable. As that lending has dried up, sale-leasebacks, like most other forms of financing, have become both more desirable and less available.
Sale-leasebacks have slowed dramatically,” said Dan Fasulo, managing director of Real Capital Analytics. “It’s counterintuitive, because you’d think that they would be thriving in this type of environment. But it doesn’t matter how good the tenants are, the lenders just are not there.”
One reason is that lenders can no longer package loans for sale-leasebacks into securities as they did during the real estate boom.
“If the debt is available, it’s available in smaller denominations, because you are working directly with a lender, not from a securitization anymore,” said Mindy Berman, the managing director of corporate capital markets at Jones Lang LaSalle.
In addition to providing another source of capital, sale-leasebacks offer a way to reap gains on property that has been on the balance sheet. Companies have been depreciating their real estate assets for years, so the book value of those assets is low and companies should realize hefty profits on sales. But commercial real estate prices have come down considerably from their 2007 highs, and some executives harbor unrealistic expectations regarding the value of their properties, experts said.
“There is still a real spread between sellers’ expectations and what buyers are willing to pay,” said Arthur Greenberg, an executive vice president in the Washington office of real estate broker Studley. “There is a lot of money sitting on the sidelines, but it is primarily private equity money, and [private equity] has higher yield expectations than the current market is offering.”
Potential investors will only consider deals for top-notch properties whose tenants have stellar credit, and they’re looking for long-term leases that stretch to 15 years instead of 10. Medical office building sale-leasebacks represent a bright spot in the industry, while deals have dried up in sectors that have suffered more from the financial slowdown, such as retail or automotive.
“Underwriting has changed significantly in the sale-leaseback realm,” said Ms. Berman of Jones Lang LaSalle. “We’re back to basics. You need to underwrite the credit of the tenant and the property fundamentals.”
Still, Ms. Berman said her office fields calls every day from companies interested in determining the value of their property and the feasibility of a sale-leaseback.
“In today’s market, everyone is desperate,” said Bill Pollert, president of CapLease, a real estate investment trust that specializes in single-tenant properties. “They’re looking for every possible way to generate capital. It’s hard for companies that are not in real estate to justify owning property.”
Experts expect the sector to lead the rebound in commercial real estate once credit conditions relax.
“Fundamentally, the economics that justify sale-leasebacks are strong and viable,” Mr. Pollert said. “It’s a segment that will come back and will be strong once the debt markets come back. There is a lot of pent-up demand out there.” Sphere: Related Content
The credit crunch is killing the trend of using sale-leasebacks to raise capital, because frozen conditions have made it nearly impossible to get deals done.
Through Nov. 1, sale-leasebacks totaled $6.2 billion, less than half of the $14.2 billion in such transactions seen during 2007, according to Real Capital Analytics. Most of the deals that do close are one-off, single-tenant transactions amounting to less than $100 million each, experts say, a change from the large portfolio deals that dominated the market in years past.
From 2002 through 2007, sale-leasebacks gained popularity with private equity firms, which sold real estate assets from acquisitions to pay off the loans used to bankroll their leveraged buyouts. Having less invested capital increased PE firms’ net returns on assets and equity.
But few other corporations saw the need for them because the liberal lending atmosphere made capital promptly and cheaply obtainable. As that lending has dried up, sale-leasebacks, like most other forms of financing, have become both more desirable and less available.
Sale-leasebacks have slowed dramatically,” said Dan Fasulo, managing director of Real Capital Analytics. “It’s counterintuitive, because you’d think that they would be thriving in this type of environment. But it doesn’t matter how good the tenants are, the lenders just are not there.”
One reason is that lenders can no longer package loans for sale-leasebacks into securities as they did during the real estate boom.
“If the debt is available, it’s available in smaller denominations, because you are working directly with a lender, not from a securitization anymore,” said Mindy Berman, the managing director of corporate capital markets at Jones Lang LaSalle.
In addition to providing another source of capital, sale-leasebacks offer a way to reap gains on property that has been on the balance sheet. Companies have been depreciating their real estate assets for years, so the book value of those assets is low and companies should realize hefty profits on sales. But commercial real estate prices have come down considerably from their 2007 highs, and some executives harbor unrealistic expectations regarding the value of their properties, experts said.
“There is still a real spread between sellers’ expectations and what buyers are willing to pay,” said Arthur Greenberg, an executive vice president in the Washington office of real estate broker Studley. “There is a lot of money sitting on the sidelines, but it is primarily private equity money, and [private equity] has higher yield expectations than the current market is offering.”
Potential investors will only consider deals for top-notch properties whose tenants have stellar credit, and they’re looking for long-term leases that stretch to 15 years instead of 10. Medical office building sale-leasebacks represent a bright spot in the industry, while deals have dried up in sectors that have suffered more from the financial slowdown, such as retail or automotive.
“Underwriting has changed significantly in the sale-leaseback realm,” said Ms. Berman of Jones Lang LaSalle. “We’re back to basics. You need to underwrite the credit of the tenant and the property fundamentals.”
Still, Ms. Berman said her office fields calls every day from companies interested in determining the value of their property and the feasibility of a sale-leaseback.
“In today’s market, everyone is desperate,” said Bill Pollert, president of CapLease, a real estate investment trust that specializes in single-tenant properties. “They’re looking for every possible way to generate capital. It’s hard for companies that are not in real estate to justify owning property.”
Experts expect the sector to lead the rebound in commercial real estate once credit conditions relax.
“Fundamentally, the economics that justify sale-leasebacks are strong and viable,” Mr. Pollert said. “It’s a segment that will come back and will be strong once the debt markets come back. There is a lot of pent-up demand out there.” Sphere: Related Content
Tuesday, November 18, 2008
Trent Ltd Considers Sale Leaseback of Retail Portfolio in India to Fund Expansion
mydigitalfc.com - November 16, 2008
Trent Ltd, the fashion retailer headed by Noel Naval Tata, is considering sale of some of its prime properties to raise cash for expansion. Because the retail business needs physical space, Trent will take the properties back on lease.
Senior Trent officials told Financial Chronicle that, at current realty prices, up to Rs 700 crore ($9 Billion) could be raised by selling its properties across India, the combined space of which is almost 300,000 sq ft.
The properties include an office building in Mumbai’s suburban business district of Bandra Kurla complex, Spencer’s Plaza in Chennai and a property each in Delhi and Ahmedabad.
“We could enter into a sale and leaseback agreement, thus freeing up a considerable amount of cash for our expansion without having to raise fresh equity through a rights issue,” a top Trent official said.
The money along with internal accruals is expected to help Trent fund its Rs 2,000 crore investment in the Star India Bazaar hypermarket chain and Westside retail stores. The company also needs money to expand its Landmark book and music stores and for its new value-retail format and investments in setting up or expanding its upmarket Sisley, Topman and Topshop retail stores.
Among listed retailers in India, Trent has the highest gross margins in terms of percentages of sales and per sq ft of space used, according to a recent study by the brokerage, CLSA. Sphere: Related Content
Trent Ltd, the fashion retailer headed by Noel Naval Tata, is considering sale of some of its prime properties to raise cash for expansion. Because the retail business needs physical space, Trent will take the properties back on lease.
Senior Trent officials told Financial Chronicle that, at current realty prices, up to Rs 700 crore ($9 Billion) could be raised by selling its properties across India, the combined space of which is almost 300,000 sq ft.
The properties include an office building in Mumbai’s suburban business district of Bandra Kurla complex, Spencer’s Plaza in Chennai and a property each in Delhi and Ahmedabad.
“We could enter into a sale and leaseback agreement, thus freeing up a considerable amount of cash for our expansion without having to raise fresh equity through a rights issue,” a top Trent official said.
The money along with internal accruals is expected to help Trent fund its Rs 2,000 crore investment in the Star India Bazaar hypermarket chain and Westside retail stores. The company also needs money to expand its Landmark book and music stores and for its new value-retail format and investments in setting up or expanding its upmarket Sisley, Topman and Topshop retail stores.
Among listed retailers in India, Trent has the highest gross margins in terms of percentages of sales and per sq ft of space used, according to a recent study by the brokerage, CLSA. Sphere: Related Content
Sunday, November 16, 2008
Banco Sabadell Considering EUR 500 Million Sale Leaseback of 600 Bank Branches Across Spain
Monereo Meyer Marinel Web Site - November 14, 2008
Banco Sabadell is considering selling approximately 50% of their branch offices. The entity is planning to sell 600 offices in its network under the sale and leaseback model, a transaction that provides investors with great security and a potential payoff of between 500 and 600 million Euros.
According to data from the Spanish newspaper Expansión, Banco Sabadell has confirmed that the transaction of the sale of up to 600 branches currently owned by the bank is in its initial phase, and would not take place until 2009. The transaction would involve the sale of blocks or parts of these assets, under the sale and leaseback model, with Sabadell remaining as a tenant for a period of between 25 and 30 years, with a final option of buying the property back, thus guaranteeing safe and steady income for the buyer. This type of transaction offers great security to investors since it is backed by an entity with a good rating. Market experts have said that the entity could earn between 500 and 600 million Euros.
According to preliminary plans, the corporate offices would not be included in the transaction although sources close to the entity note that they have also been appraised. Banco Sabadell began appraising their real estate assets a year ago and confirms that they are in no hurry to sell and intend to wait for an interesting opportunity to present itself. In fact, the bank has strengthened its balance sheet this year by selling half of its bank insurance business to Zurich, with a capital gain of 512 million Euros.
Banco Sabadell will thus join Spanish financial institutions that have decided to sell off part of their real estate holdings, a trend Banco Santander started with BBVA, Banco Popular and Caixa Galicia following suit. Sphere: Related Content
Banco Sabadell is considering selling approximately 50% of their branch offices. The entity is planning to sell 600 offices in its network under the sale and leaseback model, a transaction that provides investors with great security and a potential payoff of between 500 and 600 million Euros.
According to data from the Spanish newspaper Expansión, Banco Sabadell has confirmed that the transaction of the sale of up to 600 branches currently owned by the bank is in its initial phase, and would not take place until 2009. The transaction would involve the sale of blocks or parts of these assets, under the sale and leaseback model, with Sabadell remaining as a tenant for a period of between 25 and 30 years, with a final option of buying the property back, thus guaranteeing safe and steady income for the buyer. This type of transaction offers great security to investors since it is backed by an entity with a good rating. Market experts have said that the entity could earn between 500 and 600 million Euros.
According to preliminary plans, the corporate offices would not be included in the transaction although sources close to the entity note that they have also been appraised. Banco Sabadell began appraising their real estate assets a year ago and confirms that they are in no hurry to sell and intend to wait for an interesting opportunity to present itself. In fact, the bank has strengthened its balance sheet this year by selling half of its bank insurance business to Zurich, with a capital gain of 512 million Euros.
Banco Sabadell will thus join Spanish financial institutions that have decided to sell off part of their real estate holdings, a trend Banco Santander started with BBVA, Banco Popular and Caixa Galicia following suit. Sphere: Related Content
Friday, November 14, 2008
Taylor Wimpey Pursuing £100m Sale Leaseback of 350 UK Show Homes
Property Week - November 14, 2008
Taylor Wimpey is to carry out a sale and leaseback of around 350 of its show homes in a bid to reduce debt and improve cashflow. The listed housebuilder plans to sell the UK-wide show home portfolio for between £70m and £100m and pay rental income to the buyer for up to three years. It is thought to have instructed King Sturge and last Wednesday sent details to selected institutional-type investors.
Taylor Wimpey needs working capital and access to the show homes, which have an average value of around £200,000, to market its developments. The buyer would gain a sizeable portfolio and a guaranteed three-year income stream without voids, and eventual ownership of 350 homes at a time when the housing market could be in recovery. It could provide investors with an initial yield of between 6% and 7%.
Packaging the homes up as a portfolio is thought to be an innovative way for Taylor Wimpey, led by chief executive Peter Redfearn, to reduce its £1.9bn debt burden. In an interim management statement on Tuesday, Taylor Wimpey said it was unlikely to agree a new debt package by January, when its covenants may be tested. Redfearn said Taylor Wimpey was ready to sell parts of its UK land banks or non-core parts of the business if necessary. The sale-and-leaseback plan would be one such option.
Taylor Wimpey is valued at around £142m, down from a high of £4.3bn last year. It has significantly reduced costs with 1,900 job cuts, land sales and a construction slowdown. Neil Batty, Knight Frank’s new homes investment head, said all housebuilders were looking at ways to extract value. Sphere: Related Content
Taylor Wimpey is to carry out a sale and leaseback of around 350 of its show homes in a bid to reduce debt and improve cashflow. The listed housebuilder plans to sell the UK-wide show home portfolio for between £70m and £100m and pay rental income to the buyer for up to three years. It is thought to have instructed King Sturge and last Wednesday sent details to selected institutional-type investors.
Taylor Wimpey needs working capital and access to the show homes, which have an average value of around £200,000, to market its developments. The buyer would gain a sizeable portfolio and a guaranteed three-year income stream without voids, and eventual ownership of 350 homes at a time when the housing market could be in recovery. It could provide investors with an initial yield of between 6% and 7%.
Packaging the homes up as a portfolio is thought to be an innovative way for Taylor Wimpey, led by chief executive Peter Redfearn, to reduce its £1.9bn debt burden. In an interim management statement on Tuesday, Taylor Wimpey said it was unlikely to agree a new debt package by January, when its covenants may be tested. Redfearn said Taylor Wimpey was ready to sell parts of its UK land banks or non-core parts of the business if necessary. The sale-and-leaseback plan would be one such option.
Taylor Wimpey is valued at around £142m, down from a high of £4.3bn last year. It has significantly reduced costs with 1,900 job cuts, land sales and a construction slowdown. Neil Batty, Knight Frank’s new homes investment head, said all housebuilders were looking at ways to extract value. Sphere: Related Content
Tuesday, November 11, 2008
Eroski Agrees to EUR 361 Million Sale Leaseback of 15 Hypermarkets in Spain
Property Week - November 5, 2009
Topland has agreed the purchase of a 15-strong retail portfolio with Spanish retailer Eroski in Spain’s biggest hypermarket sale and leaseback deal.
Topland has paid €361m (£289m) for the portfolio, comprising 13 hypermarkets and two shopping centres, totalling 1.55m sq ft, in a deal which reflects a yield of approximately 6%. The properties are in the Basque area of Spain near the Pyrenees mountains.
The deal could be the first phase in a three-part sale and leaseback agreement between the two parties which could see Topland buying more than 50 Eroski properties for about €1bn (£808m).
Topland will provide equity for 30% of the first purchase with the remaining 70% coming from bank debt from a consortium of La Caixa, Banco Bilbao Vizcaya Argentaria, Banco De Sabadell, Banco Espanol De Credito, Banco De Vasconia and Caja Madrid.
Eroski has signed 25-year leases with fixed rental increases as part of the deal.
The company has been sitting on the sidelines of the investment market having amassed £1bn of equity from refinancing parts of its £5bn portfolio and through the sale of its 50% interest in a 35-strong, £950m Tesco portfolio, to Pearl Group’s Axial Investment Management in September last year. Sphere: Related Content
Topland has agreed the purchase of a 15-strong retail portfolio with Spanish retailer Eroski in Spain’s biggest hypermarket sale and leaseback deal.
Topland has paid €361m (£289m) for the portfolio, comprising 13 hypermarkets and two shopping centres, totalling 1.55m sq ft, in a deal which reflects a yield of approximately 6%. The properties are in the Basque area of Spain near the Pyrenees mountains.
The deal could be the first phase in a three-part sale and leaseback agreement between the two parties which could see Topland buying more than 50 Eroski properties for about €1bn (£808m).
Topland will provide equity for 30% of the first purchase with the remaining 70% coming from bank debt from a consortium of La Caixa, Banco Bilbao Vizcaya Argentaria, Banco De Sabadell, Banco Espanol De Credito, Banco De Vasconia and Caja Madrid.
Eroski has signed 25-year leases with fixed rental increases as part of the deal.
The company has been sitting on the sidelines of the investment market having amassed £1bn of equity from refinancing parts of its £5bn portfolio and through the sale of its 50% interest in a 35-strong, £950m Tesco portfolio, to Pearl Group’s Axial Investment Management in September last year. Sphere: Related Content
Friday, November 07, 2008
Eroski Completes €361 Million Sale Leaseback of 15 Hypermarkets in Spain
Property Week - November 5, 2008
Topland has paid €361m (£289m) for the portfolio, comprising 13 hypermarkets and two shopping centres, totalling 1.55m sq ft, in a deal which reflects a yield of approximately 6%. The properties are in the Basque area of Spain near the Pyrenees mountains.
The deal could be the first phase in a three-part sale and leaseback agreement between the two parties which could see Topland buying more than 50 Eroski properties for about €1bn (£808m).
Topland will provide equity for 30% of the first purchase with the remaining 70% coming from bank debt from a consortium of La Caixa, Banco Bilbao Vizcaya Argentaria, Banco De Sabadell, Banco Espanol De Credito, Banco De Vasconia and Caja Madrid.
Eroski has signed 25-year leases with fixed rental increases as part of the deal.
The company has been sitting on the sidelines of the investment market having amassed £1bn of equity from refinancing parts of its £5bn portfolio and through the sale of its 50% interest in a 35-strong, £950m Tesco portfolio, to Pearl Group’s Axial Investment Management in September last year.
Cushman & Wakefield advised both parties. Sphere: Related Content
Topland has paid €361m (£289m) for the portfolio, comprising 13 hypermarkets and two shopping centres, totalling 1.55m sq ft, in a deal which reflects a yield of approximately 6%. The properties are in the Basque area of Spain near the Pyrenees mountains.
The deal could be the first phase in a three-part sale and leaseback agreement between the two parties which could see Topland buying more than 50 Eroski properties for about €1bn (£808m).
Topland will provide equity for 30% of the first purchase with the remaining 70% coming from bank debt from a consortium of La Caixa, Banco Bilbao Vizcaya Argentaria, Banco De Sabadell, Banco Espanol De Credito, Banco De Vasconia and Caja Madrid.
Eroski has signed 25-year leases with fixed rental increases as part of the deal.
The company has been sitting on the sidelines of the investment market having amassed £1bn of equity from refinancing parts of its £5bn portfolio and through the sale of its 50% interest in a 35-strong, £950m Tesco portfolio, to Pearl Group’s Axial Investment Management in September last year.
Cushman & Wakefield advised both parties. Sphere: Related Content
Sunday, November 02, 2008
British Land Selling Debenhams Flagship Store in London for £150 Million
Property Week - October 31, 2008
A Ukrainian investor is under offer to buy the British Land-owned Debenhams block in London’s West End for £150m.
It is thought the investor is the same Ukrainian company which recently purchased 1 Old Bond STreet for around £14m from Scottish Widows Investment Partnership in a deal reflecting a net initial yield of 3.9%.
The company approached British Land to buy the 366,700 sq ft building which occupies a prime position on London’s main shopping street and is the department store operator’s flagship store. It has been known for some time that British Land is seeking to reduce its in-town retail exposure.
British Land, the UK’s second-largest REIT, is an investor in 36 department stores, 24 owned directly and 12 owned within the British Land Fraser joint venture.
Of those owned directly, 22 are subject to leaseback to Debenhams for a minimum of 26 years unexpired. In total these comprise 3.3m sq ft in locations including the flagship London store, a 466,000 sq ft store on Market Street in Manchester, and a 140,000 sq ft store in St Davids, Cardiff.
The total gross annual rent passing is £30.3m. The leases provide for minimum 2.5% per annum rental increases and five-yearly open market reviews from 2019 onwards.
British Land declined to comment. Sphere: Related Content
A Ukrainian investor is under offer to buy the British Land-owned Debenhams block in London’s West End for £150m.
It is thought the investor is the same Ukrainian company which recently purchased 1 Old Bond STreet for around £14m from Scottish Widows Investment Partnership in a deal reflecting a net initial yield of 3.9%.
The company approached British Land to buy the 366,700 sq ft building which occupies a prime position on London’s main shopping street and is the department store operator’s flagship store. It has been known for some time that British Land is seeking to reduce its in-town retail exposure.
British Land, the UK’s second-largest REIT, is an investor in 36 department stores, 24 owned directly and 12 owned within the British Land Fraser joint venture.
Of those owned directly, 22 are subject to leaseback to Debenhams for a minimum of 26 years unexpired. In total these comprise 3.3m sq ft in locations including the flagship London store, a 466,000 sq ft store on Market Street in Manchester, and a 140,000 sq ft store in St Davids, Cardiff.
The total gross annual rent passing is £30.3m. The leases provide for minimum 2.5% per annum rental increases and five-yearly open market reviews from 2019 onwards.
British Land declined to comment. Sphere: Related Content
Saturday, October 18, 2008
Meavita Nederland Enters Sale Leaseback of 27 Health Care Properties in the Netherlands
PropertyEU - October 16, 2008
Dutch firm Green Real Estate has acquired 27 properties from healthcare organisation Meavita Nederland in a sale-and-leaseback transaction. The financial details were not disclosed.
Meavita Nederland disposed of the properties as it no longer views real estate ownership as a core activity. The portfolio comprises 14,000 m2 of lettable area and includes consultancy offices and medical centres in the north, centre and east of the Netherlands.
The healthcare division of property broker DTZ Zadelhoff acted for Green Real Estate. Ans de Wijn Bedrijfshuisvesting advised Meavita Nederland. Sphere: Related Content
Dutch firm Green Real Estate has acquired 27 properties from healthcare organisation Meavita Nederland in a sale-and-leaseback transaction. The financial details were not disclosed.
Meavita Nederland disposed of the properties as it no longer views real estate ownership as a core activity. The portfolio comprises 14,000 m2 of lettable area and includes consultancy offices and medical centres in the north, centre and east of the Netherlands.
The healthcare division of property broker DTZ Zadelhoff acted for Green Real Estate. Ans de Wijn Bedrijfshuisvesting advised Meavita Nederland. Sphere: Related Content
Wednesday, October 15, 2008
GM Seeking $500 Million Sale Leaseback of Detroit HQ
Commercial Property News - October 14, 2008
Less than six months after it paid off its debt on its Detroit headquarters, struggling automaker General Motors is trying to refinance the Renaissance Center or arrange a sale-leaseback to raise about $500 billion.
GM officials recently appeared before the Detroit Police & Fire Retirement System Pension Fund board in an effort to get the board to agree to a $250 million collateralized revenue bond investment, according to a Detroit Free Press report. If that pension board agrees, GM would seek another $250 million from another city pension fund.
But GM may have trouble getting the first pension board to invest. Several pension board trustees told news groups that they considered it too big of a risk.
GM moved into the Renaissance Center, a seven-building complex in downtown Detroit in 1996. The automaker bought the complex for $75 million, and then borrowed $500 million against it for remodeling, according to a Detroit News story by Robert Snell. As reported May 9 by CPN, GM paid $626 million to take full control of the building.
John Blanchard, GM’s executive director of worldwide real estate, could not be reached by press time, but has stated this week that if the deal with the pension funds could not worked out, the auto giant would consider selling the Renaissance Center and leasing back space. He said the company is committed to staying in Detroit. The proposed refinancing comes as GM is trying to raise $15 billion to provide cash flow through 2010, according to published reports. Sphere: Related Content
Less than six months after it paid off its debt on its Detroit headquarters, struggling automaker General Motors is trying to refinance the Renaissance Center or arrange a sale-leaseback to raise about $500 billion.
GM officials recently appeared before the Detroit Police & Fire Retirement System Pension Fund board in an effort to get the board to agree to a $250 million collateralized revenue bond investment, according to a Detroit Free Press report. If that pension board agrees, GM would seek another $250 million from another city pension fund.
But GM may have trouble getting the first pension board to invest. Several pension board trustees told news groups that they considered it too big of a risk.
GM moved into the Renaissance Center, a seven-building complex in downtown Detroit in 1996. The automaker bought the complex for $75 million, and then borrowed $500 million against it for remodeling, according to a Detroit News story by Robert Snell. As reported May 9 by CPN, GM paid $626 million to take full control of the building.
John Blanchard, GM’s executive director of worldwide real estate, could not be reached by press time, but has stated this week that if the deal with the pension funds could not worked out, the auto giant would consider selling the Renaissance Center and leasing back space. He said the company is committed to staying in Detroit. The proposed refinancing comes as GM is trying to raise $15 billion to provide cash flow through 2010, according to published reports. Sphere: Related Content
Tuesday, September 30, 2008
Kesko Completes EUR 44 Million Sale Leaseback of 23 Stores in Finland
Kesko Web Site - September 30, 2008
The Kesko Group, the Kesko Pension Fund and Valluga-Sijoitus Oy have today sold 23 of their store properties in different parts of Finland to Aberdeen Property Fund Finland 1 Ky. The selling price is about 56 million euros, of which the Kesko Group's share is about 44 million euros. The Kesko Group's gain on the sale is about 16 million euros, which will be treated as a non-recurring item in Kesko's third quarter operating profit.
All of the above premises have been leased back for use by Kesko's division parent companies mainly under 5 or 10-year leases with extension options. The total lease liability for the properties sold by the Kesko Group is approximately 27 million euros (a 6.2% initial yield) and is not classified as a finance lease.
Of all the 23 properties included in the sale 20 are used by K-food store chains, and two by the K-rauta and Rautia chains. The sale also includes Kesko's Northern Finland district centre property in Oulu. The sale will not change the stores' operations. The total area of the properties sold is about 50,000 m2, of which the Kesko Group's share is about 35,000 m2
The aim of the property disposal is to enhance the use of the Kesko Group capital. The proceeds from the sale will be used to strengthen the store network in Finland and abroad,
At 31 December 2007, Kesko owned 1.0 million m2 of properties and had 2.6 million m2 of properties on leasehold in Finland and other Nordic countries, the Baltic countries and Russia. Kesko's store site investments were 189 million euros in 2007. Sphere: Related Content
The Kesko Group, the Kesko Pension Fund and Valluga-Sijoitus Oy have today sold 23 of their store properties in different parts of Finland to Aberdeen Property Fund Finland 1 Ky. The selling price is about 56 million euros, of which the Kesko Group's share is about 44 million euros. The Kesko Group's gain on the sale is about 16 million euros, which will be treated as a non-recurring item in Kesko's third quarter operating profit.
All of the above premises have been leased back for use by Kesko's division parent companies mainly under 5 or 10-year leases with extension options. The total lease liability for the properties sold by the Kesko Group is approximately 27 million euros (a 6.2% initial yield) and is not classified as a finance lease.
Of all the 23 properties included in the sale 20 are used by K-food store chains, and two by the K-rauta and Rautia chains. The sale also includes Kesko's Northern Finland district centre property in Oulu. The sale will not change the stores' operations. The total area of the properties sold is about 50,000 m2, of which the Kesko Group's share is about 35,000 m2
The aim of the property disposal is to enhance the use of the Kesko Group capital. The proceeds from the sale will be used to strengthen the store network in Finland and abroad,
At 31 December 2007, Kesko owned 1.0 million m2 of properties and had 2.6 million m2 of properties on leasehold in Finland and other Nordic countries, the Baltic countries and Russia. Kesko's store site investments were 189 million euros in 2007. Sphere: Related Content
Monday, September 29, 2008
Pep Boys Completes $77.5 Million Sale Leaseback of 22 Auto Parts Stores
CoStar Group - September 24, 2008
Corporate Partners Capital Group Inc., a Los Angeles-based company that specializes in structuring purchase-leaseback transactions with corporations, acquired 22 properties in various locations across the United States from The Pep Boys Manny Moe & Jack of California and Wachovia Development Corp. The aggregate purchase price was $77.5 million, or approximately $177.50 per square foot, and had an estimated cap rate of 7.5%.
The 22-retail properties total 474,434 square feet. The buyer entered into agreements to lease the properties back to be operated as Pep Boys stores.
Howard Sands of Corporate Partners Capital Group Inc. represented the buyer in-house. Harry Yanowitz, Alexander Spooner and Joe Cireli of Pep Boys and John Altmeyer of Wachovia represented the sellers in-house. Sphere: Related Content
Corporate Partners Capital Group Inc., a Los Angeles-based company that specializes in structuring purchase-leaseback transactions with corporations, acquired 22 properties in various locations across the United States from The Pep Boys Manny Moe & Jack of California and Wachovia Development Corp. The aggregate purchase price was $77.5 million, or approximately $177.50 per square foot, and had an estimated cap rate of 7.5%.
The 22-retail properties total 474,434 square feet. The buyer entered into agreements to lease the properties back to be operated as Pep Boys stores.
Howard Sands of Corporate Partners Capital Group Inc. represented the buyer in-house. Harry Yanowitz, Alexander Spooner and Joe Cireli of Pep Boys and John Altmeyer of Wachovia represented the sellers in-house. Sphere: Related Content
Friday, September 26, 2008
Del Taco Completes $24 Million Sale Leaseback of 15 Store Restaurant Portfolio
Cityfeet / GlobeSt - September 24, 2008
A locally based group of investors in a 1031 exchange have acquired a 15-store portfolio from Del Taco restaurants in a sale-leaseback, according to Faris Lee Investments, which brokered the deal. The restaurants are located in Arizona, California and Nevada and were built between 1998 and 2002.
The buyer was Innovative Property Partners LLC, a group of investors based in Orange County, who were represented by Richard Walter and Dennis Vaccaro of Faris Lee, which is based in Irvine. Del Taco Corp., which represented itself in the transaction, executed 20-year absolute NNN leases with the buyer and will continue to operate the properties.
Del Taco was founded in 1961 and operates or franchisees more than 510 restaurants in 16 states. The company is based in the Orange County city of Lake Forest.
According to Walter, who is president of Faris Lee Investments, “Del Taco Corp. was interested in a quick sale of the properties, and we were able to close the sale in just 45 days, which also met the needs of the 1031 buyer.” Walter notes that closing on 15 different sites in three different states “required a great deal of work during the due diligence process” in order to close by the deadline and to meet the expectations of both the seller and the buyer.
Walter adds that Faris Lee Capital, the financing arm for Faris Lee, coordinated and placed the financing for the buyer, who was attracted to the long-term leases and well located properties. He notes that Faris Lee is seeking other sale-leaseback opportunities to match buyer needs with niche opportunities like this one." Sphere: Related Content
A locally based group of investors in a 1031 exchange have acquired a 15-store portfolio from Del Taco restaurants in a sale-leaseback, according to Faris Lee Investments, which brokered the deal. The restaurants are located in Arizona, California and Nevada and were built between 1998 and 2002.
The buyer was Innovative Property Partners LLC, a group of investors based in Orange County, who were represented by Richard Walter and Dennis Vaccaro of Faris Lee, which is based in Irvine. Del Taco Corp., which represented itself in the transaction, executed 20-year absolute NNN leases with the buyer and will continue to operate the properties.
Del Taco was founded in 1961 and operates or franchisees more than 510 restaurants in 16 states. The company is based in the Orange County city of Lake Forest.
According to Walter, who is president of Faris Lee Investments, “Del Taco Corp. was interested in a quick sale of the properties, and we were able to close the sale in just 45 days, which also met the needs of the 1031 buyer.” Walter notes that closing on 15 different sites in three different states “required a great deal of work during the due diligence process” in order to close by the deadline and to meet the expectations of both the seller and the buyer.
Walter adds that Faris Lee Capital, the financing arm for Faris Lee, coordinated and placed the financing for the buyer, who was attracted to the long-term leases and well located properties. He notes that Faris Lee is seeking other sale-leaseback opportunities to match buyer needs with niche opportunities like this one." Sphere: Related Content
Wednesday, September 17, 2008
Citibank Seeking Sale Leaseback of 18 Bay Area Bank Branches
Silicon Valley / San Jose Business Journal - September 15, 2008
Citibank, the retail banking operation of financial services giant Citigroup Inc., has put 18 Bay Area branch locations on the market.
The locations for sale -- which include sites in Burlingame, San Mateo, Los Altos, Palo Alto, San Jose, Santa Clara and Sunnyvale -- are exceptional, said retail broker Don Tepman.
“Most, if not all, of these properties are very well located and I consider them to be among the Bay Area’s top real estate sites for retail,” Tepman said. “Rarely do we see product of this quality with such strong credit tenant backing.”
Citibank is offering to sell the locations and to sign 10-year leases plus options, according to an offering document. The company is promising annual 3 percent rent increases. The sites are for sale individually and en masse.
Citi has retained CB Richard Ellis to handle the offering. Sphere: Related Content
Citibank, the retail banking operation of financial services giant Citigroup Inc., has put 18 Bay Area branch locations on the market.
The locations for sale -- which include sites in Burlingame, San Mateo, Los Altos, Palo Alto, San Jose, Santa Clara and Sunnyvale -- are exceptional, said retail broker Don Tepman.
“Most, if not all, of these properties are very well located and I consider them to be among the Bay Area’s top real estate sites for retail,” Tepman said. “Rarely do we see product of this quality with such strong credit tenant backing.”
Citibank is offering to sell the locations and to sign 10-year leases plus options, according to an offering document. The company is promising annual 3 percent rent increases. The sites are for sale individually and en masse.
Citi has retained CB Richard Ellis to handle the offering. Sphere: Related Content
Sunday, September 14, 2008
State of California Enters 20 Year Lease for Highway Patrol HQ in Sacramento
GlobeSt.com - September 12, 2008
The state has inked a 20-year lease for a 285,000-sf, three-building low-rise campus here on behalf of the California Highway Patrol. Known as Continental Plaza, the buildings will be used to consolidate CHP’s administrative functions, which are now spread among several buildings in the Sacramento area. The law enforcement agency is slated to fill its new headquarters with 1,000 employees next September.
The state’s lease rate starts at $2.44 per sf per month, fully serviced with the exception of utilities, an information office with the state Department of General Services tells GlobeSt.com. The lease agreement includes a $41-million ($144 per-sf) tenant improvement allowance, annual rental rate bumps (approximately 1.5%) and a purchase option that may be exercised at the end of either year 10 or year 20. If exercised at year 10, the purchase price would be based on a 7% cap rate on the property’s NOI for year 11, according to DGS. If exercised at the end of the lease term, the purchase price would be based on a 7% cap rate on the NOI rent from year 19. If the state pays rent for 20 years, it would pay the property owner $193 million, according to DGS.
“The fact that Continental Plaza was an existing facility offered many benefits, including cost savings to the agency, an accelerated occupancy schedule and the reuse of an existing structure, [which is] part of the state’s ‘green’ strategy,” Newland says. Per state requirements, all three buildings will be renovated with the goal of receiving a LEED-NC-Silver certification from the US Green Building Council.
The property owner is Grove Investment Co. of Newport Beach, CA. Grubb & Ellis brokers Bill Newland, Clyde Rawlings and Toss Vallentine represented the building owner in the transaction. Cornish & Carey represented the state. Sphere: Related Content
The state has inked a 20-year lease for a 285,000-sf, three-building low-rise campus here on behalf of the California Highway Patrol. Known as Continental Plaza, the buildings will be used to consolidate CHP’s administrative functions, which are now spread among several buildings in the Sacramento area. The law enforcement agency is slated to fill its new headquarters with 1,000 employees next September.
The state’s lease rate starts at $2.44 per sf per month, fully serviced with the exception of utilities, an information office with the state Department of General Services tells GlobeSt.com. The lease agreement includes a $41-million ($144 per-sf) tenant improvement allowance, annual rental rate bumps (approximately 1.5%) and a purchase option that may be exercised at the end of either year 10 or year 20. If exercised at year 10, the purchase price would be based on a 7% cap rate on the property’s NOI for year 11, according to DGS. If exercised at the end of the lease term, the purchase price would be based on a 7% cap rate on the NOI rent from year 19. If the state pays rent for 20 years, it would pay the property owner $193 million, according to DGS.
“The fact that Continental Plaza was an existing facility offered many benefits, including cost savings to the agency, an accelerated occupancy schedule and the reuse of an existing structure, [which is] part of the state’s ‘green’ strategy,” Newland says. Per state requirements, all three buildings will be renovated with the goal of receiving a LEED-NC-Silver certification from the US Green Building Council.
The property owner is Grove Investment Co. of Newport Beach, CA. Grubb & Ellis brokers Bill Newland, Clyde Rawlings and Toss Vallentine represented the building owner in the transaction. Cornish & Carey represented the state. Sphere: Related Content
Thursday, September 11, 2008
Norske Skog Completes $75 Million Sale Leaseback of HQ in Norway
Reuters - September 9, 2008
Norwegian papermaker Norske Skog (NSG.OL) has sold its headquarters for 429.5 million Norwegian crowns ($75.76 million) and will book a gain of 230 million in the fourth quarter from the property sale, it said on Tuesday.
'The sale of the property is part of the work efforts to reduce Norske Skog's debts,' the company said in a statement.
Norske Skog simultaneously signed a lease agreement on the Oxenoen property in Lysaker with the new owners, Aspelin Ramm and Oslo housing and savings society OBOS, enabling it to stay in the building for some time, the company said. Sphere: Related Content
Norwegian papermaker Norske Skog (NSG.OL) has sold its headquarters for 429.5 million Norwegian crowns ($75.76 million) and will book a gain of 230 million in the fourth quarter from the property sale, it said on Tuesday.
'The sale of the property is part of the work efforts to reduce Norske Skog's debts,' the company said in a statement.
Norske Skog simultaneously signed a lease agreement on the Oxenoen property in Lysaker with the new owners, Aspelin Ramm and Oslo housing and savings society OBOS, enabling it to stay in the building for some time, the company said. Sphere: Related Content
Monday, September 08, 2008
IRS Extends Offer to Settle LILO & SILO Law Suits
The Providence Journal / Bloomberg - September 6, 2008
The Internal Revenue Service gave 45 companies, including Providence-based Textron Inc. as well as utilities and banks, an extra month to decide whether to settle disputes over their use of a leasing tax shelter ruled improper by several courts.
In exchange for terminating the transactions, known as lease-in, lease-out or sale-in, lease-out deals, the companies can keep 20 percent of their savings and the IRS will waive some penalties.
The settlement offer involves shelters such as the one used by Wachovia Corp., which an appeals court ruled against in April. The bank said the ruling would cost it $975 million in back taxes.
The tax agency, in an announcement on its Web site, said companies have 60 days to respond to an offer letter it began sending on Aug. 6. The extension from 30 days was granted “to provide taxpayers with sufficient time to evaluate the offer,” the Web site says.
Under the terms of the IRS’ offers, the companies must use their best efforts to terminate the transactions by Dec. 31. In some cases, the IRS will give taxpayers until Dec. 31, 2010, to unwind the deals.
Companies must agree to concede 80 percent of all deductions associated with the transactions for taxes due in years before 2008. In exchange, the IRS won’t tax certain income generated by the transactions for the same years.
An IRS release said the government won’t agree to settle any of a taxpayer’s shelter-related tax issues unless the bank or company accepts the settlement terms for all of its lease transactions.
Companies have been trying to decide whether to accept the settlement or take their chances in court, said Ralph Izzo, chief executive officer of one of the 45 targeted companies, Public Service Enterprise Group Inc., owner of New Jersey’s largest utility. The IRS has scored victories in federal courts against BB&T Corp., Fifth Third Bancorp and KeyCorp.
Izzo said at an investor conference that, in his company’s case, taking the settlement may exceed cash reserves it has set aside.
The settlement offer affects a “broad range of companies,” Shulman said last month. In addition to banks, companies such as Altria Group Inc., the largest U.S. tobacco company, and Textron, maker of Cessna aircraft, engaged in the transactions.
The tax shelters, known by the acronyms LILO and SILO, entail letting banks or other companies to buy subway cars or other public assets and lease them back to cities or transit authorities. The banks and companies claimed tax deductions, such as depreciation on the equipment.
The leasing arrangements provided revenue to cities, transit systems, airport authorities and other municipal services.
Promoters of the transactions, such as Brussels-based Dexia SA, told clients that the arrangements would let buyers save on taxes as the assets depreciated, although the companies wouldn’t own or operate the equipment or services. The IRS challenged the arrangements in court, saying the purchase-and-lease transactions were shams designed to produce tax deductions on assets that the banks and companies never truly owned.
From 2001 to 2003, at least 16 U.S. companies bought transportation assets from cities through 35 leasing agreements. Other companies sought tax breaks by leasing municipal services, such as sewer lines in Germany and the Alamodome arena in San Antonio, as well as emergency 911 call centers in Chicago and air-traffic-control systems in Australia, Canada and France.
Shulman said about 1,000 separate transactions could be unwound as a result of the settlement. Sphere: Related Content
The Internal Revenue Service gave 45 companies, including Providence-based Textron Inc. as well as utilities and banks, an extra month to decide whether to settle disputes over their use of a leasing tax shelter ruled improper by several courts.
In exchange for terminating the transactions, known as lease-in, lease-out or sale-in, lease-out deals, the companies can keep 20 percent of their savings and the IRS will waive some penalties.
The settlement offer involves shelters such as the one used by Wachovia Corp., which an appeals court ruled against in April. The bank said the ruling would cost it $975 million in back taxes.
The tax agency, in an announcement on its Web site, said companies have 60 days to respond to an offer letter it began sending on Aug. 6. The extension from 30 days was granted “to provide taxpayers with sufficient time to evaluate the offer,” the Web site says.
Under the terms of the IRS’ offers, the companies must use their best efforts to terminate the transactions by Dec. 31. In some cases, the IRS will give taxpayers until Dec. 31, 2010, to unwind the deals.
Companies must agree to concede 80 percent of all deductions associated with the transactions for taxes due in years before 2008. In exchange, the IRS won’t tax certain income generated by the transactions for the same years.
An IRS release said the government won’t agree to settle any of a taxpayer’s shelter-related tax issues unless the bank or company accepts the settlement terms for all of its lease transactions.
Companies have been trying to decide whether to accept the settlement or take their chances in court, said Ralph Izzo, chief executive officer of one of the 45 targeted companies, Public Service Enterprise Group Inc., owner of New Jersey’s largest utility. The IRS has scored victories in federal courts against BB&T Corp., Fifth Third Bancorp and KeyCorp.
Izzo said at an investor conference that, in his company’s case, taking the settlement may exceed cash reserves it has set aside.
The settlement offer affects a “broad range of companies,” Shulman said last month. In addition to banks, companies such as Altria Group Inc., the largest U.S. tobacco company, and Textron, maker of Cessna aircraft, engaged in the transactions.
The tax shelters, known by the acronyms LILO and SILO, entail letting banks or other companies to buy subway cars or other public assets and lease them back to cities or transit authorities. The banks and companies claimed tax deductions, such as depreciation on the equipment.
The leasing arrangements provided revenue to cities, transit systems, airport authorities and other municipal services.
Promoters of the transactions, such as Brussels-based Dexia SA, told clients that the arrangements would let buyers save on taxes as the assets depreciated, although the companies wouldn’t own or operate the equipment or services. The IRS challenged the arrangements in court, saying the purchase-and-lease transactions were shams designed to produce tax deductions on assets that the banks and companies never truly owned.
From 2001 to 2003, at least 16 U.S. companies bought transportation assets from cities through 35 leasing agreements. Other companies sought tax breaks by leasing municipal services, such as sewer lines in Germany and the Alamodome arena in San Antonio, as well as emergency 911 call centers in Chicago and air-traffic-control systems in Australia, Canada and France.
Shulman said about 1,000 separate transactions could be unwound as a result of the settlement. Sphere: Related Content
Saturday, August 30, 2008
Southern Cross Healthcare Agrees to £31.1 Million Sale Leaseback of Nine UK Care Homes
RTTNews - August 29, 2008
Southern Cross Healthcare, a provider of UK care home services, announced the sale and long-term leaseback of the freehold interests in nine care homes to a subsidiary of Daejan Holdings Plc for £31.1 million.
The gross asset value of the nine freehold interests is £37.2 million. The company said it would incur a book loss of £6.1 million on completion of the sale. It will pay £2.5 million for these homes as annual rent (8.0% cap rate.)
The company said it will use the proceeds from the divestment to partially pay down two syndicated credit facilities and a bilateral credit facility put in place earlier this year to fund additional acquisitions and developments.
Further, Bill Colvin, chief executive of Southern Cross, said, "Discussions are ongoing with other potential purchasers regarding further 20 freeholds to be divested and the proceeds from any sale will also be used to further reduce borrowings. Southern Cross is continuing to discuss with its banking syndicate the provision of longer term funding arrangements for the Group." Sphere: Related Content
Southern Cross Healthcare, a provider of UK care home services, announced the sale and long-term leaseback of the freehold interests in nine care homes to a subsidiary of Daejan Holdings Plc for £31.1 million.
The gross asset value of the nine freehold interests is £37.2 million. The company said it would incur a book loss of £6.1 million on completion of the sale. It will pay £2.5 million for these homes as annual rent (8.0% cap rate.)
The company said it will use the proceeds from the divestment to partially pay down two syndicated credit facilities and a bilateral credit facility put in place earlier this year to fund additional acquisitions and developments.
Further, Bill Colvin, chief executive of Southern Cross, said, "Discussions are ongoing with other potential purchasers regarding further 20 freeholds to be divested and the proceeds from any sale will also be used to further reduce borrowings. Southern Cross is continuing to discuss with its banking syndicate the provision of longer term funding arrangements for the Group." Sphere: Related Content
Wednesday, August 27, 2008
Life Time Fitness Complets $100 Millon Sale Leaseback of Four US Fitness Centers
MarketWatch / Business Wire - August 25, 2008
Senior Housing Properties Trust (SNH) today announced that it has acquired four health and wellness centers operated by Life Time Fitness, Inc. (LTM) for $100 million. Simultaneously, SNH entered into a long term lease arrangement with Life Time Fitness for these same properties.
The rent payable by Life Time Fitness to SNH for these four health and wellness centers will be $9.1 million per year (9.1% cap rate), plus fixed increases during the lease term. These health and wellness centers have a lease term ending in 2028, plus tenant renewal options thereafter. SNH has funded this transaction by drawing under its revolving bank credit facility.
Senior Housing Properties Trust is a real estate investment trust which owns independent and assisted living communities, nursing homes, rehabilitation hospitals, wellness centers and medical office buildings throughout the United States. SNH is headquartered in Newton, MA. Sphere: Related Content
Senior Housing Properties Trust (SNH) today announced that it has acquired four health and wellness centers operated by Life Time Fitness, Inc. (LTM) for $100 million. Simultaneously, SNH entered into a long term lease arrangement with Life Time Fitness for these same properties.
The rent payable by Life Time Fitness to SNH for these four health and wellness centers will be $9.1 million per year (9.1% cap rate), plus fixed increases during the lease term. These health and wellness centers have a lease term ending in 2028, plus tenant renewal options thereafter. SNH has funded this transaction by drawing under its revolving bank credit facility.
Senior Housing Properties Trust is a real estate investment trust which owns independent and assisted living communities, nursing homes, rehabilitation hospitals, wellness centers and medical office buildings throughout the United States. SNH is headquartered in Newton, MA. Sphere: Related Content
Sunday, August 24, 2008
AT&T Completes $72 Million Sale Leaseback of Atlanta Office Complex
Jones Lang LaSalle Web Site - August 22, 2008
Jones Lang LaSalle announced today it has closed the sale and leaseback of the two-building complex in Atlanta’s Northlake/Lavista submarket for AT&T. Equity Capital Management purchased the 406,292 square foot complex for $72 million.
At closing, AT&T executed a long-term leaseback for for both 2245 and 2247 Northlake Parkway in Tucker, Georgia, signaling its continued commitment to the facility and market.
This transaction marks the first closing within the Jones Lang LaSalle capital markets group by a newly-merged/legacy Staubach team. Managing Directors Jay Koster (New York) and Brad Armstrong (Atlanta) completed this assignment along with Vice Presidents Mike Hochanadel and Chris Wagner. The same transaction team completed the $275.2 million, 1.1 million square foot, sale-leaseback of Lenox Park, located in Atlanta’s Buckhead submarket, for AT&T in May of this year.
The Class-A property is located in the northeast Atlanta metropolitan area in the city of Tucker. It has immediate access to I-285 and is just three miles from the I-85/I-285 junction. Atlanta’s Hartsfield-Jackson International Airport is less than 25 minutes away, and the property is just 15 minutes from Dekalb Peachtree Airport. The building known as 2245 Northlake Parkway has three stories and was built in 1980. The building known as 2247 Northlake Parkway is a 10-story building built in 2000. Combined, the properties have more than 1,500 parking spaces, both structured and surface. Sphere: Related Content
Jones Lang LaSalle announced today it has closed the sale and leaseback of the two-building complex in Atlanta’s Northlake/Lavista submarket for AT&T. Equity Capital Management purchased the 406,292 square foot complex for $72 million.
At closing, AT&T executed a long-term leaseback for for both 2245 and 2247 Northlake Parkway in Tucker, Georgia, signaling its continued commitment to the facility and market.
This transaction marks the first closing within the Jones Lang LaSalle capital markets group by a newly-merged/legacy Staubach team. Managing Directors Jay Koster (New York) and Brad Armstrong (Atlanta) completed this assignment along with Vice Presidents Mike Hochanadel and Chris Wagner. The same transaction team completed the $275.2 million, 1.1 million square foot, sale-leaseback of Lenox Park, located in Atlanta’s Buckhead submarket, for AT&T in May of this year.
The Class-A property is located in the northeast Atlanta metropolitan area in the city of Tucker. It has immediate access to I-285 and is just three miles from the I-85/I-285 junction. Atlanta’s Hartsfield-Jackson International Airport is less than 25 minutes away, and the property is just 15 minutes from Dekalb Peachtree Airport. The building known as 2245 Northlake Parkway has three stories and was built in 1980. The building known as 2247 Northlake Parkway is a 10-story building built in 2000. Combined, the properties have more than 1,500 parking spaces, both structured and surface. Sphere: Related Content
Friday, August 22, 2008
General Reinsurance Signs 20 Year Lease for Stamford HQ
BNET / Real Estate Weekly - August 20, 2008
A team that recently joined Jones Lang LaSalle through its merger with The Staubach Company has completed a new direct lease transaction for General Reinsurance Corp. at Building and Land Technology's Long Ridge Corporate Center campus in Stamford, Conn. The reinsurance company signed a 20-year lease for the entire 310,000 s/f 120 Long Ridge Road office building.
The tenant was represented by Brian Higgins, managing director--brokerage, Jay Koster, managing director--capital markets, and Chris Kraus, managing director--brokerage, all with Jones Lang LaSalle's New York office. The team worked closely with Michael A. Rea, vice president with Gen Re, throughout the process. Property owner Building and Land Technology was represented in-house by Carl Kuehner, chief executive officer, and Paul Kuehner, chief financial officer.
Gen Re is relocating to 120 Long Ridge Road from 695 East Main Street, also known as Financial Centre, which had served as the reinsurer's headquarters for the past 25 years. The company's master lease at Financial Centre is set to expire in 2010. Gen Re plans to occupy its new headquarters space at 120 Long Ridge Road in late 2009. Sphere: Related Content
A team that recently joined Jones Lang LaSalle through its merger with The Staubach Company has completed a new direct lease transaction for General Reinsurance Corp. at Building and Land Technology's Long Ridge Corporate Center campus in Stamford, Conn. The reinsurance company signed a 20-year lease for the entire 310,000 s/f 120 Long Ridge Road office building.
The tenant was represented by Brian Higgins, managing director--brokerage, Jay Koster, managing director--capital markets, and Chris Kraus, managing director--brokerage, all with Jones Lang LaSalle's New York office. The team worked closely with Michael A. Rea, vice president with Gen Re, throughout the process. Property owner Building and Land Technology was represented in-house by Carl Kuehner, chief executive officer, and Paul Kuehner, chief financial officer.
Gen Re is relocating to 120 Long Ridge Road from 695 East Main Street, also known as Financial Centre, which had served as the reinsurer's headquarters for the past 25 years. The company's master lease at Financial Centre is set to expire in 2010. Gen Re plans to occupy its new headquarters space at 120 Long Ridge Road in late 2009. Sphere: Related Content
AT&T Completes $345 Million Sale Leaseback of Dallas HQ
Atlanta Business Chronicle - August 20, 2008
An otherwise pretty mundane summer 2008 in the Atlanta commercial real estate marketplace is closing out with the biggest of bangs, thanks to a mega-deal involving several big names and a high-profile property.
In a blockbuster, $345 million transaction that closed Aug. 14, global telecommunications provider AT&T Inc. (NYSE: T) entered into a sale-leaseback agreement for AT&T Tower, the 1.8 million-square-foot building at 675 West Peachtree St. that is the most visible component of its three-building Southeastern regional headquarters complex.
AT&T sold the landmark 47-story Midtown building — which was known as the BellSouth Tower until the $86 billion AT&T/BellSouth merger in 2006 — to a wholly owned subsidiary of Icahn Enterprises L.P., a holding company headed by billionaire financier and investor Carl Icahn. As part of the transaction, AT&T agreed to lease the building back on an unspecified mid- to long-term basis.
On the brokerage side, the deal was negotiated by a Jones Lang LaSalle Inc. capital markets team comprising managing directors Jay Koster and Brad Armstrong, along with vice presidents Mike Hochanadel and Chris Wagner. Koster and Hochanadel are based in JLL’s New York office, while Armstrong and Wagner are part of the real estate services provider’s Atlanta operations. Sphere: Related Content
An otherwise pretty mundane summer 2008 in the Atlanta commercial real estate marketplace is closing out with the biggest of bangs, thanks to a mega-deal involving several big names and a high-profile property.
In a blockbuster, $345 million transaction that closed Aug. 14, global telecommunications provider AT&T Inc. (NYSE: T) entered into a sale-leaseback agreement for AT&T Tower, the 1.8 million-square-foot building at 675 West Peachtree St. that is the most visible component of its three-building Southeastern regional headquarters complex.
AT&T sold the landmark 47-story Midtown building — which was known as the BellSouth Tower until the $86 billion AT&T/BellSouth merger in 2006 — to a wholly owned subsidiary of Icahn Enterprises L.P., a holding company headed by billionaire financier and investor Carl Icahn. As part of the transaction, AT&T agreed to lease the building back on an unspecified mid- to long-term basis.
On the brokerage side, the deal was negotiated by a Jones Lang LaSalle Inc. capital markets team comprising managing directors Jay Koster and Brad Armstrong, along with vice presidents Mike Hochanadel and Chris Wagner. Koster and Hochanadel are based in JLL’s New York office, while Armstrong and Wagner are part of the real estate services provider’s Atlanta operations. Sphere: Related Content
Thursday, August 21, 2008
Tesco Completes $1.1 Billion Sale Leaseback of 13 UK Stores & Distribution Center
Bloomberg - August 21, 2008
Tesco Plc, the U.K.'s biggest retailer, sold properties to real-estate investors for 605 million pounds ($1.1 billion), its fourth such disposal in two years, freeing up capital for overseas expansion.
The 13 stores and a distribution center were purchased by four buyers, including investment arms of insurers Prudential Plc and Sun Life Financial Inc., and represent 2.4 percent of the value of the grocer's stores, Cheshunt, England-based Tesco said today. The company is leasing back the properties for 20 years, with the right to extend the contracts.
Tesco has about 1,780 U.K. outlets. It gets more than 25 percent of its sales abroad and entered the U.S. last year. Over the past two years, rising values for property assets had lured investors to retailers such as J Sainsbury Plc, which rebuffed demands for a real-estate split.
``Tesco freehold property sales show that there is still good pension-fund appetite for supermarkets,'' analyst Nick Bubb of Pali International said in an e-mailed note.
The disposal is part of Tesco's plan, announced two years ago, to raise 5 billion pounds through property sales, of which it has so far raised 2 billion pounds, including today's announcement.
The stores all pay landlords a return of at least 4.88 percent on their investment as a percentage of the purchase price, Tesco said. The company has estimated the value of all of its real estate at 31 billion pounds.
One of the buyers was the Universities Superannuation Scheme, Britain's second-largest pension fund, which runs money for academics and college staff. Tesco formed a joint venture with USS that will own the property.
The rest of the properties were bought by Prudential Plc's Prupim property-investment arm, Sun Life's Canada Life division, and LaSalle Investment Management, a unit of commercial real- estate broker Jones Lang LaSalle Inc. Sphere: Related Content
Tesco Plc, the U.K.'s biggest retailer, sold properties to real-estate investors for 605 million pounds ($1.1 billion), its fourth such disposal in two years, freeing up capital for overseas expansion.
The 13 stores and a distribution center were purchased by four buyers, including investment arms of insurers Prudential Plc and Sun Life Financial Inc., and represent 2.4 percent of the value of the grocer's stores, Cheshunt, England-based Tesco said today. The company is leasing back the properties for 20 years, with the right to extend the contracts.
Tesco has about 1,780 U.K. outlets. It gets more than 25 percent of its sales abroad and entered the U.S. last year. Over the past two years, rising values for property assets had lured investors to retailers such as J Sainsbury Plc, which rebuffed demands for a real-estate split.
``Tesco freehold property sales show that there is still good pension-fund appetite for supermarkets,'' analyst Nick Bubb of Pali International said in an e-mailed note.
The disposal is part of Tesco's plan, announced two years ago, to raise 5 billion pounds through property sales, of which it has so far raised 2 billion pounds, including today's announcement.
The stores all pay landlords a return of at least 4.88 percent on their investment as a percentage of the purchase price, Tesco said. The company has estimated the value of all of its real estate at 31 billion pounds.
One of the buyers was the Universities Superannuation Scheme, Britain's second-largest pension fund, which runs money for academics and college staff. Tesco formed a joint venture with USS that will own the property.
The rest of the properties were bought by Prudential Plc's Prupim property-investment arm, Sun Life's Canada Life division, and LaSalle Investment Management, a unit of commercial real- estate broker Jones Lang LaSalle Inc. Sphere: Related Content
Tuesday, August 19, 2008
Bulgarian Telecom Planning EUR 300 Million Sale Leaseback of 100 Properties
Estates Gazette is reporting that Bulgaria’s former state telecom operator Bulgarian Telecommunications Co (BTC) is seeking international investors for a large 20-year sale-and-leaseback transaction.
The company will reportedly market a €300m portfolio of its most valuable 100 sites in September, including the Telecom Palace in Sophia, which could be redeveloped. BTC will lease back some of the offices and warehouses for up to 20 years, offering the rest for development. The initial yield on the 3.2m sq ft portfolio will be 10%.
Cushman & Wakefield affiliate Forton International is representing BTC which is reviewing whether it needs to own any of its 2,000 properties. BTC wants to release equity to invest in core operations.
BTC was privatised in 2004 and is now owned by US insurance giant AIG. Sphere: Related Content
The company will reportedly market a €300m portfolio of its most valuable 100 sites in September, including the Telecom Palace in Sophia, which could be redeveloped. BTC will lease back some of the offices and warehouses for up to 20 years, offering the rest for development. The initial yield on the 3.2m sq ft portfolio will be 10%.
Cushman & Wakefield affiliate Forton International is representing BTC which is reviewing whether it needs to own any of its 2,000 properties. BTC wants to release equity to invest in core operations.
BTC was privatised in 2004 and is now owned by US insurance giant AIG. Sphere: Related Content
Canadian Tire Agrees to CAN $174 Million Sale Leaseback of 12 Stores Across Canada
The Chronicle Herald - August 19, 2008
Hard goods retailer Canadian Tire Corp. says it has struck a deal to sell and lease back 12 of its store properties for $174 million. Canadian Tire said late Monday the company will book a pre-tax gain on the sale of about $70 million. The transaction is subject to Competition Act approval and is expected to close in September.
The properties are located across Canada and include recently built or expanded Canadian Tire stores. Six of the properties also have a Mark’s Work Wearhouse outlet, the retailer’s clothing division.
Canadian Tire owns about 74 per cent of its store network and leases the rest of its other retail properties. The properties sold Monday represent about four per cent of Canadian Tire’s total real estate portfolio.
"While we continue to see real value in owning the majority of our real estate assets, carefully selected sale-leasebacks enable us to monetize the value of select properties creating financial flexibility while maintaining our overall operating flexibility." said Tom Gauld, president and CEO of the company.
"The properties included in this transaction are locations featuring stores that are either new or recently expanded so we do not see a need to relocate these stores in the foreseeable future. "This enables us to monetize these sites at attractive rates while creating financial flexibility."
Canadian Tire did not identify the buyer or buyers of the retail properties. Earlier this summer, however, the company sold an Ottawa store property for $40 million to RioCan Real Estate Investment Trust, Canada’s largest shopping mall owner, in a sale-leaseback deal.
In its release late Monday, Canadian Tire said it will continue to selectively look at cashing in on its extensive real estate assets, including two urban Canadian Tire stores and an Eastern Canada warehouse announced earlier this year.
Canadian Tire operates 1,170 general merchandise and apparel retail stores and gasoline stations across Canada. The company, with 57,000 employees, sells auto parts, sports and lesure equipment and home products. Sphere: Related Content
Hard goods retailer Canadian Tire Corp. says it has struck a deal to sell and lease back 12 of its store properties for $174 million. Canadian Tire said late Monday the company will book a pre-tax gain on the sale of about $70 million. The transaction is subject to Competition Act approval and is expected to close in September.
The properties are located across Canada and include recently built or expanded Canadian Tire stores. Six of the properties also have a Mark’s Work Wearhouse outlet, the retailer’s clothing division.
Canadian Tire owns about 74 per cent of its store network and leases the rest of its other retail properties. The properties sold Monday represent about four per cent of Canadian Tire’s total real estate portfolio.
"While we continue to see real value in owning the majority of our real estate assets, carefully selected sale-leasebacks enable us to monetize the value of select properties creating financial flexibility while maintaining our overall operating flexibility." said Tom Gauld, president and CEO of the company.
"The properties included in this transaction are locations featuring stores that are either new or recently expanded so we do not see a need to relocate these stores in the foreseeable future. "This enables us to monetize these sites at attractive rates while creating financial flexibility."
Canadian Tire did not identify the buyer or buyers of the retail properties. Earlier this summer, however, the company sold an Ottawa store property for $40 million to RioCan Real Estate Investment Trust, Canada’s largest shopping mall owner, in a sale-leaseback deal.
In its release late Monday, Canadian Tire said it will continue to selectively look at cashing in on its extensive real estate assets, including two urban Canadian Tire stores and an Eastern Canada warehouse announced earlier this year.
Canadian Tire operates 1,170 general merchandise and apparel retail stores and gasoline stations across Canada. The company, with 57,000 employees, sells auto parts, sports and lesure equipment and home products. Sphere: Related Content
Friday, August 15, 2008
Longs Drug Stores to Pursue $1 Billion Sale Leaseback of Drug Stores, Distribution Centers and Office Buildings
The Modesto Bee - August 13, 2008
Longs Drug Stores, a regional drugstore chain based in Walnut Creek, is being acquired by industry giant CVS Caremark Corp., based in Woonsocket, R.I.
The $2.9 billion acquisition will make CVS Caremark the largest drugstore chain in California, with 830 stores. The company is the leading provider of prescriptions in the United States, and with the acquisition of the 521 Longs stores, it will operate 6,800 drugstores in 41 states and the District of Columbia.
One of the big attractions to buying Longs, said Tom Ryan, CVS chairman, president and chief executive officer, is gaining a strong market position in Central and Northern California and Hawaii. The two chains have few overlapping stores, according to Ryan. The Central and Northern California markets are difficult to enter because of the lack of available drugstore sites, Ryan said. Expanding into the markets by developing its own stores would have taken CVS about 10 years, he said.
Part of the cost of buying the Longs stores would be raised by selling the store properties that Longs owns, along with three distribution centers and three office buildings. The properties would be leased back to CVS, Ryan said. He estimated the value of the Longs properties at $1 billion.
The sale is subject to Longs shareholder approval and federal review. It is expected to be completed during the fourth quarter of this year. Sphere: Related Content
Longs Drug Stores, a regional drugstore chain based in Walnut Creek, is being acquired by industry giant CVS Caremark Corp., based in Woonsocket, R.I.
The $2.9 billion acquisition will make CVS Caremark the largest drugstore chain in California, with 830 stores. The company is the leading provider of prescriptions in the United States, and with the acquisition of the 521 Longs stores, it will operate 6,800 drugstores in 41 states and the District of Columbia.
One of the big attractions to buying Longs, said Tom Ryan, CVS chairman, president and chief executive officer, is gaining a strong market position in Central and Northern California and Hawaii. The two chains have few overlapping stores, according to Ryan. The Central and Northern California markets are difficult to enter because of the lack of available drugstore sites, Ryan said. Expanding into the markets by developing its own stores would have taken CVS about 10 years, he said.
Part of the cost of buying the Longs stores would be raised by selling the store properties that Longs owns, along with three distribution centers and three office buildings. The properties would be leased back to CVS, Ryan said. He estimated the value of the Longs properties at $1 billion.
The sale is subject to Longs shareholder approval and federal review. It is expected to be completed during the fourth quarter of this year. Sphere: Related Content
Sears Completes $56.1 Million Sale Leaseback of Warehouse in PA
Cityfeet.com / GlobeSt.com - August 13, 2008
Sears Holdings Corp. has sold its one-million-sf distribution center at Covington Industrial Park to San Antonio-based USAA Real Estate Co.'s US Industrial REIT II. Published reports say the build-to-suit facility, which opened in April with Sears Logistics Services as its long-term tenant, changed hands for $56.1 million.
James Sheehan, senior director with Cushman & Wakefield Inc.'s Philadelphia office, tells GlobeSt.com that a sizable, brand-new facility like this is "extremely appealing to large institutional investors." Sheehan arranged the sale along C&W's Jerome Kranzel, Jeff Williams, Steve Cooper, Gerry Blinebury and James Vesey.
Completed in 2007, the building is the newest and largest of four facilities at the 800-acre industrial park, developed by Chicago-based First Industrial Realty Trust. It offers 32-foot clear heights, tilt-up concrete walls, ESFR sprinklers, cross-docking and additional trailer storage. Although a confidentiality agreement prevents him from disclosing the per-sf rates that Sears Logistics is paying, Sheehan says industrial rents in the northeastern Pennsylvania corridor range from "the high $3 to $4 range."
First Industrial had secured the Hoffman Estates, IL-based Sears as a build-to-suit tenant in in March 2007. The Sears site is in a portion of the park designated as a Keystone Opportunity Expansion Zone, which provides certain tax abatements through 2013. At that time, GlobeSt.com reported Pennsylvania's Department of Community and Economic Development and the Greater Scranton Chamber of Commerce provided Sears with $90,000 in customized job-training funds. Sphere: Related Content
Sears Holdings Corp. has sold its one-million-sf distribution center at Covington Industrial Park to San Antonio-based USAA Real Estate Co.'s US Industrial REIT II. Published reports say the build-to-suit facility, which opened in April with Sears Logistics Services as its long-term tenant, changed hands for $56.1 million.
James Sheehan, senior director with Cushman & Wakefield Inc.'s Philadelphia office, tells GlobeSt.com that a sizable, brand-new facility like this is "extremely appealing to large institutional investors." Sheehan arranged the sale along C&W's Jerome Kranzel, Jeff Williams, Steve Cooper, Gerry Blinebury and James Vesey.
Completed in 2007, the building is the newest and largest of four facilities at the 800-acre industrial park, developed by Chicago-based First Industrial Realty Trust. It offers 32-foot clear heights, tilt-up concrete walls, ESFR sprinklers, cross-docking and additional trailer storage. Although a confidentiality agreement prevents him from disclosing the per-sf rates that Sears Logistics is paying, Sheehan says industrial rents in the northeastern Pennsylvania corridor range from "the high $3 to $4 range."
First Industrial had secured the Hoffman Estates, IL-based Sears as a build-to-suit tenant in in March 2007. The Sears site is in a portion of the park designated as a Keystone Opportunity Expansion Zone, which provides certain tax abatements through 2013. At that time, GlobeSt.com reported Pennsylvania's Department of Community and Economic Development and the Greater Scranton Chamber of Commerce provided Sears with $90,000 in customized job-training funds. Sphere: Related Content
ECI Seeking $42 Million Sale Leaseback on Petah Tikva HQ
Globes - August 14, 2008
Sources inform ''Globes'' that ECI Telecom Ltd. wants to sell its Petah Tikva headquarters for NIS 150 million in a sale and lease-back deal in long-term contract. The company has already contacted a number of insurance companies about a deal.
This is not the first time that ECI has sought to sell the building. Three months ago, it published a tender for the sale of all its properties for NIS 350 million. The tender included the headquarters, building rights on the same lot in Petah Tikva, and an additional lot in Givat Shmuel. The tender was closed in May after no bids were filed, apparently because the development aspects of the lands on offer were of no interest to insurance companies. Sphere: Related Content
Sources inform ''Globes'' that ECI Telecom Ltd. wants to sell its Petah Tikva headquarters for NIS 150 million in a sale and lease-back deal in long-term contract. The company has already contacted a number of insurance companies about a deal.
This is not the first time that ECI has sought to sell the building. Three months ago, it published a tender for the sale of all its properties for NIS 350 million. The tender included the headquarters, building rights on the same lot in Petah Tikva, and an additional lot in Givat Shmuel. The tender was closed in May after no bids were filed, apparently because the development aspects of the lands on offer were of no interest to insurance companies. Sphere: Related Content
Sunday, August 10, 2008
HVB Seeking Sale Leaseback of 200 Bank Branches in Germany
ADVFN News / Thomson Financial - August 8, 2008
Bayerische Hypo-und-Vereinsbank (HVB), the German unit of UniCredit Spa, is looking for buyers of its estimated 200 branch building under a sale and leaseback deal arrangement, according to Financial Times Deutschland, citing a spokesman for HVB.
It said HVB wants to sell its building properties, including those housing the main administration offices in Munich and Hamburg, to some real estate investors.
It said HVB wants to generate a mid-range three-digit million euros proceeds and is aiming to complete the deal by the end of the year. Sphere: Related Content
Bayerische Hypo-und-Vereinsbank (HVB), the German unit of UniCredit Spa, is looking for buyers of its estimated 200 branch building under a sale and leaseback deal arrangement, according to Financial Times Deutschland, citing a spokesman for HVB.
It said HVB wants to sell its building properties, including those housing the main administration offices in Munich and Hamburg, to some real estate investors.
It said HVB wants to generate a mid-range three-digit million euros proceeds and is aiming to complete the deal by the end of the year. Sphere: Related Content
Friday, August 08, 2008
Northrup Grumman Signs Long Term Lease For Office Tower in El Sugundo, CA
Cityfeet / GlobeSt.com - August 6, 2008
Northrop Grumman Corp. has signed a 10-year, $120 million lease for all 333,000 sf at the 16-story, 101 Continental Blvd. office tower in one of the largest office leases in El Segundo in years. Although others involved in the deal declined to comment, citing confidentiality agreements, Northrop spokesman Brooks McKinney confirms that the aerospace giant will be expanding into the 101 Continental building, which is owned by Los Angeles-based Barker Pacific Group and Prudential Real Estate Investors.
Northrop Grumman is expected to begin moving into the building in phases, beginning in early December, and should fully occupy the building by July of next year. Xerox Corp. has leased space in the building since 1983 and still occupies a portion of the 16-story tower, which was built in 1972 and formerly was known as Xerox Centre. Xerox is slated to move out of its remaining space before the move-in by Northrop Grumman.
According to a report last year on GlobeSt.com, the owners of the 101 Continental building were marketing it as a multi-tenant property, rather than the single-tenant facility that it will be when Northrop Grumman moves in. Barker Pacific Group at the time said that it planned a $30 million renovation of the office tower to transform it to class A multi-tenant space, but how much of the $30 million in renovations will be necessary remains in question now that the office tower will be a single-tenant facility as opposed to multi-tenant.
McKinney tells GlobeSt.com that Northrop Grumman needs the 333,000 sf at 101 Continental for expansion of its Integrated Systems and Information Technology sectors, plus some space for corporate office administrative and engineering support functions. The aerospace giant has been growing of late, reporting a year-over-year earnings increase to $483 million from $472 million and a revenue boost of 10% to $8.6 billion for the second quarter ended June 30. Sphere: Related Content
Northrop Grumman Corp. has signed a 10-year, $120 million lease for all 333,000 sf at the 16-story, 101 Continental Blvd. office tower in one of the largest office leases in El Segundo in years. Although others involved in the deal declined to comment, citing confidentiality agreements, Northrop spokesman Brooks McKinney confirms that the aerospace giant will be expanding into the 101 Continental building, which is owned by Los Angeles-based Barker Pacific Group and Prudential Real Estate Investors.
Northrop Grumman is expected to begin moving into the building in phases, beginning in early December, and should fully occupy the building by July of next year. Xerox Corp. has leased space in the building since 1983 and still occupies a portion of the 16-story tower, which was built in 1972 and formerly was known as Xerox Centre. Xerox is slated to move out of its remaining space before the move-in by Northrop Grumman.
According to a report last year on GlobeSt.com, the owners of the 101 Continental building were marketing it as a multi-tenant property, rather than the single-tenant facility that it will be when Northrop Grumman moves in. Barker Pacific Group at the time said that it planned a $30 million renovation of the office tower to transform it to class A multi-tenant space, but how much of the $30 million in renovations will be necessary remains in question now that the office tower will be a single-tenant facility as opposed to multi-tenant.
McKinney tells GlobeSt.com that Northrop Grumman needs the 333,000 sf at 101 Continental for expansion of its Integrated Systems and Information Technology sectors, plus some space for corporate office administrative and engineering support functions. The aerospace giant has been growing of late, reporting a year-over-year earnings increase to $483 million from $472 million and a revenue boost of 10% to $8.6 billion for the second quarter ended June 30. Sphere: Related Content
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