US Theatre Chain Negotiating $135 Million Sale Leaseback of 19 Movie Theatres

GlobeSt.com - November 12, 2009

Entertainment Properties Trust is negotiating a letter of intent with what it describes as “a prominent theatre operator” for a $135-million sale-leaseback, according to a filing with the Securities and Exchange Commission this week. In addition, the locally-based REIT, which trades under the ticker EPR, is in discussions with a tenant regarding the purchase of several more charter school properties and is raising new equity for what its C suite has termed “growth transactions.”

The contemplated theatre deal involves 19 properties with 291 screens, 67,000 seats and 1.56 million square feet of space combined, according to the Nov. 10 filing. If the transaction is closed, EPR expects the properties to be leased to the theatre operator under one master lease, structured as a triple-net lease with an initial 20-year term and an initial base rent equal to the purchase price multiplied by 12%, plus rent escalators every five years. “The theatre operator is currently negotiating with a third party for the purchase of the theatres,” the filing states. “It is anticipated that [EPR] would acquire the theatre properties directly from the third party and lease them to the theatre operator.”

Meanwhile, the same filing discloses that EPR is discussing an option to buy as many as five charter schools from Imagine Schools Inc. The purchases as well as plans to invest in the expansion of a charter school the REIT already owns, is estimated to total $50 million.

During the company’s third quarter earnings conference call last week, EPR executives alluded to possible transactions in the theatre and charter school property markets, saying they have been spending a lot of time looking at deals in the 11% to 12% cap rate range. The deals are generally coming from “distressed sellers, not necessarily distressed properties, but distressed sellers,” president and chief executive officer David Brain said during the call. Sphere: Related Content

MTD Capital Agrees to $52 Million Sale Leaseback of Two Office Towers in Malaysia

Business Times - November 6, 2009

MTD Capital Bhd said it will sell both its MTD Building and Bangunan Shell Malaysia to its major shareholder for RM175 million to fund its highway project in Phillipines.

MTD’s wholly owned unit, MTD Properties Sdn Bhd, has agreed to sell MTD Building, a 14-storey office tower for RM70 million to Haluan Gigih Sdn Bhd (HSGB), a unit of Alloy Consolidated Sdn Bhd, which in turn is MTD’s major shareholder.

It will also sell the 12 storey Bangunan Shell to HGSB for RM105 million.

MTD Properties will lease back the MTD Building as it is the group’s headquarters. Sphere: Related Content

Downer EDI Works Seeks Sale Leaseback of 22 Sites in New Zealand

NZ Herald News - November 6, 2009

Downer EDI Works, the listed national infrastructure business, is advertising 22 properties in a big sale-and-leaseback deal. Cos Bruyn, Manukau-based chief executive, said Downer wanted to free up capital and get out of real estate so it could expand the business into new areas.

The diversified engineering and services group is offering to lease back its big works depots and provincial bases for 10 to 20 years, paying new owners so it can continue to operate from the same sites. Downer will pay an annual rent on each property of from $12,000 to $1.17 million. It operates here as a subsidiary of the Australian business but is listed on NZX.

Six large regional depots are being advertised for sale by private treaty closing on November 26, to be leased for 20 years. The other 16 properties will be leased on decade-long terms with four rights of renewal for five years. Those will be offered at two auctions.

Charles Cooper, Colliers International's Queen St-based national industrial director, said the agency had been involved in sale-and-leaseback deals this year for NZ Post, Fisher & Paykel Appliances and Farmlands. Sphere: Related Content

Banesto Seeking EUR 100 Million Sale Leaseback of 24 Bank Branches Across Spain

Reuters (as translated by Google)- November 3, 2009

Banesto (BTO.MC) has 24 sales offices in operation 'sale & leaseback' with which they hoped to raise 150 million euros, a source said Tuesday the operation concedora .

A spokesman for Banesto confirmed that the agency had given a mandate to Aguirre Newman sales, but declined comment on the amount of the transaction.

A spokesman for Aguirre Newman also commented on the transaction. "Banesto has put up for sale 'sale & leaseback' office a package of 150 million euros," the source said.

The financial institution follows in the footsteps of its parent Santander (SAN.MC) two years ago sold for subsequent lease its headquarters in Boadilla del Monte and several bundles of branches. Sphere: Related Content

EnergyAustralia Seeking $100 Million Sale Leaseback of Downtown Sydney HQ

The Sydney Morning Herald - November 3, 2009

The EnergyAustralia headquarters at George Street, opposite Sydney’s Town Hall, where a $100 million sale and leaseback is planned, is on the market as the NSW Government prepares to sell the electricity retailer. Sphere: Related Content

Collapse of Bond Insurers Slams Municipal Transit Agencies

The New York Times - November 1, 2009

(Note: While these transit authority deals did not involve real estate, they clearly demonstrate that fact that credit risk can never be completely eliminated. And transit authorities are not alone in their misery.)

Like a tsunami that follows an undersea earthquake, collateral damage from the collapse of credit markets is about to strike the millions of daily transit riders in America’s biggest cities. Public transit agencies in cities including New York, Atlanta, San Francisco and Washington are under pressure to surrender $2 billion from their budgets because financial institutions have spotted a chance to gain a windfall from complicated tax-shelter deals known as “leasebacks.”

In the heady 1990s, the federal government encouraged these leaseback deals as a quick fix for budget problems. Transit agencies like New York’s Metropolitan Transportation Authority would sell their railcars and other equipment to banks, which would then lease them back to the agencies.

Leasebacks appeared to promise that everyone would emerge a winner. Banks — including many that later took federal bailout money like Bank of America and Wells Fargo — were able to cash in on substantial tax deductions through the transactions. The transit companies, which were paid with a portion of those tax savings, could use the cash to modernize their systems and make safety improvements.

Alas, as with any quick fix, the deals have set off a cascade of problems.

First, while the Internal Revenue Service declared the deals illegal in 2004, it allowed previously completed deals to remain on the books. And the situation exploded last fall when financial markets crashed and the third-party insurers chosen by the transit agencies as guarantors of the transactions lost their triple-A credit ratings (in many cases, the insurer was A.I.G.). This placed the transit agencies in “technical default” on the leases, even though they hadn’t missed any payments.

In turn, many of the banks have decided to take advantage of these “technical defaults” to reap a windfall in early-termination payments. By rights, they can immediately demand from transit authorities an amount equal to all their anticipated tax savings. These can run to hundreds of millions of dollars — New Jersey Transit alone is on the hook for $150 million.

Virtually all major city and state public transit systems in the country have at least one of these deals still on the books. If they have to make these payments, commuters will bear the brunt, in terms of higher fares and deferred maintenance.

A solution exists, however. Senator Robert Menendez, a Democrat from New Jersey, and Representative John Lewis, a Georgia Democrat, have proposed a bill that would levy a 100 percent excise tax on any lump-sum payments demanded by the banks. This would effectively force the financial industry to stop demanding default penalties and go back to the old lease payment schedule — at no cost to taxpayers.

As the nation climbs out of one of its toughest economic crises ever, we cannot be lulled into thinking the problems caused by imprudent financing techniques have vanished. Yes, the transit groups were unwise to get involved in the leasebacks, but that’s no reason to let banks continue to exploit loopholes in them at the expense of transit riders. Congress must act to protect commuters and taxpayers from this insidious legacy of a careless period in American finance. Sphere: Related Content

Aurora Health Care Completes $169 Million Sale Leaseback of 10 Medical Buildings in Wisconsin

JSOnline - October 2, 2009

Aurora Health Care Inc. has sold 10 eastern Wisconsin buildings to a Massachusetts-based real estate investment trust for $169 million, a company spokesman said Friday.

Aurora sold the medical office buildings and outpatient surgery centers to SNH Medical Office Properties Trust Inc., a real estate investment trust based in the Boston area, said Aurora spokesman Ron Irwin. The buildings total 640,000 square feet, according to SNH Medical.

The buildings will be leased back to Aurora, which has done other sale-leasebacks. Those transactions provide cash for Aurora to invest into its medical operations and reduce its debt.

The facilities sold are in Wauwatosa, at 3289 N. Mayfair Road; Glendale, at 3003 W. Good Hope Road, and 7000 N. Range Line Road; Pewaukee, at W231-N1440 Corporate Court; Grafton, at 215 W. Washington Ave.; Mount Pleasant, at 8348 Washington Ave. and 8400 Washington Ave., and Sheboygan, at 1221 N. 26th St., 2414 Kohler Memorial Drive, and 1222 N. 23rd St.

SNH Medical is a subsidiary of Senior Housing Properties Trust, based in Newton, Mass. Senior Housing Properties primarily owns nursing homes, assisted living centers and other residential properties, but has been diversifying by buying medical office buildings and other medical facilities, said Timothy Bonang, vice president of investor relations.

Aurora, in two separate sales earlier this year, sold six medical office buildings to Santa Ana, Calif.-based Grubb & Ellis Healthcare REIT Inc. for around $75 million.

(NOTE: A quarterly earnings release from the buyer indicates that the transaction was a 15 year sale leaseback at an initial rent of approximately $15 million annually - an initial yield of approximately 8.9%.) Sphere: Related Content

Solyndra Signs Largest Bay Area Industrial Lease in 20 Years

Reuters - October 28, 2009

Overton Moore Properties (OMP), announced today that it has signed the largest warehouse/manufacturing lease that has been executed over the past 20 years in the San Francisco Bay Area with Solyndra, Inc. Headquartered in Fremont, CA, Solyndra designs and manufactures photovoltaic systems, comprised of panels and mounting hardware, for the commercial rooftop market and has a contractual backlog of over $ 2 billion. OMP and Solyndra signed a 12 year lease for the 506,490 square foot Page Technology Park, in Fremont, CA. “This is a great way to finish up 2009 with the leasing of Page Technology Park. This is terrific news for the market and we successfully executed our business plan for this asset,” noted Timur Tecimer, President & COO of Overton Moore Properties.

Although the specific terms of the lease were not disclosed, it is reported that the total value of the lease is in excess of 45 million dollars. Solyndra also has an option to acquire the property during part of the lease term. “OMP believed, as did we, that the heavy infrastructure and clear height along with the building’s size were very desirable attributes for the emerging cleantech segment of the market. Solyndra was always on the radar given their pipeline of business, but we had very detailed discussions with a number of other larger tenants as well. We still see opportunity in this sector,” notes Rob Shannon, CBRE.

Page Technology Park will be a back-end facility for Solyndra that will support the recently announced construction of its second solar panel manufacturing plant. Solyndra is the first company to receive a loan guaranteed by the U.S. Department of Energy under Title XVII of the Energy Policy Act of 2005.

OMP recently acquired the property in December 2008 from Hewlett- Packard (HP). The property was acquired when the capital markets were in a tailspin and when the commercial real state market had stalled. OMP was one of the few buyers in the marketplace that could actually close deals during the fourth quarter of 2008. OMP acquired the property in an all cash transaction with a six month lease back from HP. “We were very conservative in our underwriting and had a margin of safety with our downtime, free rent and rental rates,” noted Tecimer. OMP acquired the asset due to the acquisition price, unique features of the building infrastructure, lack of direct competition, freeway access and submarket location.

The property, built in 1982, consists of manufacturing, warehouse, labs, and office/work area representing 506,490 square feet on nearly 30 acres. OMP strongly believes in acquiring assets below replacement in exceptional infill locations. The property has substantial infrastructure in place including 21 kVA utility service, 100% air-conditioned facilities, epoxy-coated ESD concrete slab floors, overhead power distribution bars in the manufacturing area, emergency power, 25-28’ clear heights, fully calculated and ESFR sprinkler systems.

The acquisition by OMP in December 2008 was their first industrial acquisition in Northern California. OMP will continue to strategically acquire assets in Northern California as well as in other markets in Southern California, Arizona and Nevada. Assets that will be targeted include: vacant buildings, buildings with roll-over risk within the first two years, asset repositioning and re-development. OMP through its investment fund OMP Industrial III acquires industrial assets on an all cash basis.

OMP was represented by Rob Shannon, Joe Kelley and Ben Knight of CBRE and Greig Lagomarsino of Colliers International and Solyndra was represented by John Olenchalk of GVA Kidder Mathews. Sphere: Related Content

Arizona Planning $735 Milion Sale Leaseback of State Buildings

New York Times - October 20, 2009

A tentative plan to implement a budget-balancing maneuver by raising $735 million from investors calls for allowing individuals and institutions to buy securities that would be backed by collateral consisting of a bulk package of prisons and other state buildings, officials said Monday.

The Department of Administration said it intends to implement the sale-leaseback strategy by assembling all the properties in a package that would be "nominally sold" to investors as part of securities sales in January.

The securities -- certificates of participation -- would entitle investors to proportional shares of annual lease payments by the state for up to 20 years.

Under the budget legislation signed into law by Gov. Brewer on Sept. 4, ownership of the properties would revert to the state at the end of the lease.

The financing arrangement is a key element of a range of strategies which Brewer and legislators used to close a projected $3 billion shortfall. However, the state still faces a projected $1.5 billion midyear gap because Brewer vetoed part of the budget and because of still-slumping revenue and a deficit carried forward from the last fiscal year.

Though state officials have tentatively settled on an approach to use to implement the budget strategy through the sale of certificates of participation, they also are open to any suggested alternatives, said department Comptroller Clark Partridge said. "We're looking for the best deal for Arizona."

The properties included on a tentative list for use in the budget plan range from a park visitor center to the House and Senate buildings and various prisons.

The nature of the assets -- they generally are properties the state could not or would not give up -- would provide some peace of mind to investors that the state intends to stick with the deal, department spokesman Alan Ecker.

Ecker said the state has received "hundreds of phone calls" from real estate brokers and others concerning the investment opportunity.

He declined to release a list of the callers, saying it was being treated as a confidential procurement matter. Sphere: Related Content

Eurohold Completes EUR 27 Million Sale Leaseback of HQ in Sofia

PropertyEU - October 16, 2009

Bulgarian industrial and financial group Eurohold has sold the Avto Union Centre office building in Sofia in a sale-and-leaseback transaction to private equity firm Bluehouse Capital Partners. The transaction price amounts to some EUR 27 mln.

Located on Christopher Columbus Boulevard, the scheme is currently 95%-let to Eurohold which will continue to use the property as its main headquarters. The scheme also houses the first car mall in Bulgaria with nine car brands and 47 different car models on display.

Eurohold said that it will use EUR 16.8 mln of proceeds from the sale to repay a construction loan to Piraeus Bank Bulgaria, while the remaining EUR 10.5 mln will be invested in its core business.

'The deal is part of the continuing efforts of Eurohold to divest non-core assets,' the company said. The accounting gain from the sale is EUR 7 mln, it added.

Focused on the South Eastern European markets, Bluehouse manages around EUR 320 mln of assets through three opportunity funds. Sphere: Related Content

Virgin Blue Seeks Sale Leaseback of Brisbane HQ

Jones Lang LaSalle Web Site - October 16, 2009

Jones Lang LaSalle has been appointed to provide tenant representation and transaction management services for the Virgin Blue property portfolio in Australia, New Zealand and the South Pacific Islands.

The three-year contract appoints Jones Lang LaSalle, Corporate Solutions, to handle all real estate transactions for the entire Virgin Blue property portfolio in the Asia Pacific region, which is made up of 144 individual leases, licences and owned assets.

This includes 131 in Australia, eight in New Zealand, and one each in Fiji, Vanuatu, Solomon Islands, Rarotonga and Papua New Guinea.

The first project for Jones Lang LaSalle will be to manage the sale of ‘Virgin Village’, Virgin Blue’s Brisbane Headquarters located at 56 Edmonstone Road, on a sale and leaseback arrangement.

The one-year-old campus style headquarters is made up of three buildings totalling 13,220 sqm net lettable area. ‘Virgin Village’ currently houses approximately 1,000 Virgin Blue employees. Virgin Blue will continue to occupy the entire campus.

Tony Wyllie, National Head, Corporate Solutions for Jones Lang LaSalle, said, “This important contract further strengthens Jones Lang LaSalle’s position in the Asia Pacific market as the only service provider that combines transactional expertise, facilities management with national, regional and global capabilities for clients.

“As part of a tailored corporate real estate solution for Virgin Blue, our specialist property services will support Virgin Blue’s core business and allow them to continue to focus on what they do best for their customers, as we use our expertise to make maximum use of their property portfolio,” he said. Sphere: Related Content

B&Q Agrees to "Blend and Extend" Deal on UK Store Portfolio to Reduce Costs

Property Week - October 9, 2009

B&Q and British Land have agreed a landmark lease transaction that will enable the retailer to reduce its costs and the landlord to improve property values. B&Q has reduced its rent by 10% at seven of its warehouse-format stores, in return for extending the lease length. The new arrangement allows B&Q to reduce its rent by 10% in exchange for taking on new 20-year leases with no breaks and rents linked to the Retail Prices Index (RPI).

After the 10% reduction the average rent is £14.85/sq ft. The transaction also includes a new lease at a mini-warehouse at Cwmbran in Wales. British Land bought the seven B&Q stores in a £198m purchase and leaseback in 2005. The seven stores total around 700,000 sq ft. B&Q has 330 stores in the UK and Ireland.

Iain Small, B&Q’s director of property acquisition and management, said: “This regear is in line with our company-wide policy to reduce costs across the business. We have achieved an immediate 10% rent reduction across seven key trading stores.” John Madison, director at British Land, said: “This meets our strategy to drive values and shape the portfolio into well-let, long-term investments.”

Martin Supple, joint head of out-of-town retail at Cushman & Wakefield, said: “This regear is a win-win solution for both parties. It shows opportunities exist in the current market for landlords to sit down with key tenants and find ways to help them reduce costs, while still enhancing their own capital asset value.”

B&Q hopes to enter into similar arrangements with other landlords. It believes that, by offering something in return, landlords will agree to a rent reduction. Parent company Kingfisher last month reported that B&Q’s UK and Ireland sales were up 1.2% and profit was up 66% for the 26-week period to 1 August, compared with the previous year.

David Childs, director of B&Q Properties, is to leave the business after 17 years. His responsibilities will be divided among the existing team. Sphere: Related Content

Unicredit Completes EUR 1.1 Billion Sale Leaseback of Banking Properties in Italy

PropertyEU - October 5, 2009

Italian bank Unicredit has sold EUR 1.1 bn of property assets in two separate transactions in a bid to boost liquidity. The Milan-based lender is 'looking to reduce its property holdings from EUR 8.8 bn at present to around EUR 6 bn in the next two to three years,' Unicredit's Deputy CEO Paolo Fiorentino told Italian media during a press conference held to present the operation.

Unicredit has disposed of 13 properties for a total of EUR 574 mln, consisting of EUR 230 mln of equity and EUR 344 mln of bank financing. The assets, which have been sold to an investment vehicle managed by Italian fund manager Ream SGR, include trophy buildings such as the Milan headquarter of Banca di Roma in Piazza Edison and the head office of the former Credito Italiano in Genoa's Via Dante. The majority of the buildings will be leased back to Unicredit with rental contracts of six and 18 years. The bank realises a capital gain of EUR 110 mln through the transaction, it said.

The fund, with a life of 15 years, is targeting annual returns of 11%. It is 35%-controlled by several institutional investors including Fondazione Crt while Unicredit holds a further 35%, which it committed to sell by the first half of 2010.

The Milan-base lender is selling a further 179 properties in a EUR 530 mln sale and leaseback with fund manager Fimit. The properties will be transferred to Fimit's Omicron Plus fund, which was launched at the end of 2008 in tandem with the purchase of a first tranche of Unicredit properties for EUR 800 mln. The properties are fully let to the Italian bank with rental contracts of 18 years, with an option for a further six years. The operation results in capital gains of EUR 163 mln for Unicredit.

Finally, Unicredit has announced the sale of 3,200 units in the Omicron fund to Singapore's sovereign wealth fund GIC Real Estate for a total of EUR 78 mln. After the disposal, the Italian bank will have completed the sale of all its units in Omicron Plus. Sphere: Related Content

Acciona Seeking EUR 60 Million Sale Leaseback of Two Buildings in Madrid

PropertyEU - October 5, 2009

Spanish construction group Ferrovial has received a number of bids for its Madrid headquarters which would see the building taken over under a sale-and-leaseback structure. The firm is now considering the offers for the headquarters located at Principe de Vergara in the Spanish capital, a spokesperson for the company told news agency Reuters. Ferrovial is said to be targeting a price of EUR 43 mln for the building.

Separately, Spanish infrastructure and renewable energy company Acciona is said to have put on the market two of its buldings in the La Moraleja de Alcobendas business park in Madrid. According to an article in Spanish newspaper Cinco Dias, the building could fetch up to EUR 60 mln. The operation, which is being managed by CBRE, is planned as a sale-and-leaseback deal.

A number of Spanish companies have been trying to sell their properties over the past months in an effort to generate cash. Last week, Spain's second-largest bank BBVA unveiled the EUR 1.1 bn sale of its bank branch portfolio consisting of 948 assets. Spanish manufacturer Gallina Blanca Star also sold its head office in Barcelona this week to real estate firm Iberfindim, owned by the Fossati family, for around EUR 15 mln. Aguirre Newman advised the company in the sale process. Sphere: Related Content

UK Ministry of Defense Planning £50 Million Sale Leaseback of Offices in Glasgow

Herald Scotland - September 27, 2009

The Ministry of Defence is planning a major UK-wide property disposal programme as part of efforts to shore up its embattled budget, according to trade union sources.

Following last week’s report that the MoD plans a £50 million sale and leaseback of Kentigern House, the 1700-strong personnel office in the Broomielaw area of Glasgow, the move is said to be an early salvo in a much bigger programme that could involve selling-off everything from army careers offices to fuel depots to barracks and bases.

Ian Fraser, West of Scotland branch secretary for the Public and Commercial Services Union, said that a team had been assembled at the Defence Estates offices in Rosyth to co-ordinate so-called “Project Sale”, which will see many more properties sold and then leased back by their new owners to the MoD where appropriate.

The former top secret RAF airbase at Machrihanish on the Kintyre peninsula was sold earlier this year, while union bosses have been told that the Navy Buildings at Greenock, which houses marines, amphibious police and coastguards, will close in March 2011 and also be sold. There had also been plans to close a missile testing range spread across the Uists, but they were recently abandoned in the face of local protests, saving 125 jobs.

Fraser said: “We have been told by management that Kentigern is just the first. The MoD is one of the biggest landowners in Europe – they are waiting to see how it goes and will then start going for other sites. “They will sell anything they can sell.” Such a project would certainly make sense given the MoD budget is already thought to be running at a £1.5 billion deficit and is widely tipped to bear the brunt of public spending cuts regardless of which party wins the next general election.

Fraser said that the unions were opposed to both the Kentigern House sale and any further sale and leaseback deals on the grounds that they will squeeze MoD budgets in the long-run. With Kentigern House, for instance, the cost to the ministry over the first 20 years of any deal is set to be at least £70m.

He said there were also concerns that the move would be the start of the MoD withdrawing from Kentigern, amid union consultations with management about several small departments moving to England, but other sources countered that a 20-year lease was a strong sign of its commitment to the site.

Fraser said: “If this is such good value for the public purse, why has it taken 28 years [since the Glasgow offices were completed] to think of it?

“We think that the best security for Kentigern House is to keep it in the MoD and continue to own the building.”

A spokeswoman for the MoD denied that there was a fully-developed project to sell swathes of the estate, but said: “We regularly look at some of our sites for sale and leaseback opportunities. At present we are only considering this for Kentigern House and Abbey Wood in Bristol [the ministry’s procurement headquarters].

“Any other similar moves will depend on whether they are commercially viable. I can’t give a percentage of the proportion of the estate that we want to sell because it doesn’t exist.”

She added: “The proposed sale and leaseback at Kentigern House is a normal commercial arrangement to realise capital from the estate. It’s an attractive investment opportunity, given the MoD’s covenant as a long-term tenant, and has generated significant interest from financial institutions.” Sphere: Related Content

Caja Madrid Seeking EUR 70 Million Sale Leaseback of 58 Bank Branches in Spain

Expansión (as translated via Google) - September 29, 2009

Caja Madrid has released 58 branches to its network, an operation that provided input at least 70 million euros ($102.4 million) according to BusinessWeek reported yesterday. The Executive Committee of the box was informed of the operation in its meeting yesterday.

In line with what we already have other banks and savings banks Caja Madrid wants to perform, through its private bank Altae a sale & leaseback transaction, ie sale and subsequent lease of the properties. It will target a gain of 40 million.

The lease is for 25 years plus four renewals of five years, after which the lender has an option to repurchase. It also has a preferential option if the tenant wishes to dispose of the investment.

The investor will receive an annual return of 6% plus CPI. The offices up for sale are distributed throughout the national territory and 70% of them are located in provincial capitals.

With this operation, the second box Spanish intends to strengthen its capital and improve its balance sheet, as they have done entities such as Santander, BBVA, Caixa Galicia and Banco Pastor. The sale of the property resulting from their low balance, which reversed a decline in risk-weighted assets, or, put another way, less need for capital.

Many of the Spanish financial institutions have already made, or are considering such operations. BBVA has just closed his for 1.154 million last week.

Others like Sabadell, which also will eventually be raised to sell their entire branch network, given the situation in the housing market have opted to sell in small lots, they're putting mainly private banking clients. In fact, the very Caja Madrid will assess the market response to its offer to decide whether to sell more offices. Its branch network with 2183 totals as of June, of which about half is in Madrid.

Fight with the Electoral Commission
Aguirre and Gallardon returned yesterday to fight in the Electoral Commission when the first box, backed by a large majority, demanded that the president of this body, Fernando Serrano-del Ayuntamiento-is inhibited in the court case initiated by the consistory against implementation of the new law on regional boxes to the electoral process of the entity.

Most claim that Serrano may not represent the Commission, whichever is called to testify at trial. Serrano declined to vote on the issue, not being included in the agenda. The Aguirre had asked to convene another meeting tomorrow. In addition, Esperanza Aguirre, said yesterday that Rodrigo Rato TVE and Ignacio Gonzalez could preside Caja Madrid.

Sell and rent
1. Runs the operation through its private bank and hopes to join Altae 70 million, with gains of 40 million.

2. It stays as a tenant for 25 years renewable for another 20 and secured an option to buy.

3. Many Spanish banks and savings banks have launched similar operations to improve its balance sheet. Sphere: Related Content

Tesco Ponders Another £400 Million Sale Leaseback of UK Property Portfolio

Estates Gazette Blog - September 28, 2009

The FT fails to mention this morning that former City golden girl Robin Saunders is involved in a deal that will see Tesco insert £400m of its stores into a new fund called Index Linked Properties. Even so, the principle (as well as the principal) behind the fund sounds interesting.

Saunders is the photogenic American who used to make the headlines at WestLB bank before leaving after a tiff in 2003. In 2005 she set up a £1b property fund with dealmaker Paul Bloomfield. Not sure what happened to that. But Saunders runs Clearbrook Capital out of 25, Grosvenor Street. Last summer she announced the firm had a £1b to spend.

The FT says Clearbrook and DTZ are to manage Index Linked Properties: a name which betrays the cautious thinking behind the fund. It will be a closed-end Jersey investment company which will only add properties with index-linked leases to the £400m of stock that Tesco are contributing by way of sale and leaseback.

What can go wrong? Finding more of the same stock perhaps? There are now dozens of nascent property funds, many given to empty boasting of having £1b of "firepower". But here we have a fund that appears to have bagged £400m of safe and solid stock and only wants more of the same. Sounds like a buy. Sphere: Related Content

Getty Realty Completes $49 Million Sale Leaseback of 36 Exxon Gas Stations in Washington DC Metro Area

Getty Realty Web Site - September 28, 2009

Getty Realty Corp. (NYSE: GTY) announced today that on Friday September 25, 2009 it acquired 36 Exxon branded gasoline station and convenience store properties located primarily in Prince George’s County, Maryland, for $49.0 million in a sale/leaseback transaction with White Oak Petroleum LLC.

The 36 properties were acquired in a simultaneous transaction among ExxonMobil, White Oak Petroleum and Getty Realty Corp., whereby White Oak Petroleum acquired the properties from ExxonMobil and simultaneously completed a sale/leaseback of all 36 properties with Getty Realty Corp. The unitary triple net lease for the properties between White Oak Petroleum and Getty Realty Corp. has an initial term of 20 years plus renewal options. The properties will continue to be operated under the Exxon brand by the existing independent dealers. White Oak Petroleum is an affiliate of DAG Enterprises, Inc., led by Joe Mamo, one of the largest motor fuel distributors in the DC, Virginia and suburban Maryland area.

Getty Realty Corp. is the largest publicly-traded real estate investment trust in the United States specializing in ownership and leasing of convenience store/gas station properties and petroleum distribution terminals. The Company owns and leases approximately 1,100 properties nationwide. Sphere: Related Content

Ferrovial Nearing EUR 43 Million Sale Leaseback of Madrid HQ

Reuters - September 29, 2009

Spanish construction-to-services group Ferrovial (FER.MC) said on Tuesday it had received various offers for its Madrid headquarters on a sale and leaseback arrangement.

The firm was considering the offers for the headquarters in Principe de Vergara, said a spokesman.

"Our core business is not property," he said. Ferrovial is an infrastructure company with operations in 48 countries in a range of sectors including construction, airport, toll road, and car park management and maintenance, and municipal services.

A source close to the deal said Ferrovial wanted about 43 million euros (USD 62.6m) for the building.

A number of Spanish companies, including banks Santander (SAN.MC), BBVA (BBVA.MC) and Pastor (PAS.MC), have sold buildings to raise liquidity, leasing them from the buyer. Sphere: Related Content

HSBC Nearing $2 Billion Sale Leaseback of Assets in New York, London & Paris

Reuters - September 29, 2009

HSBC, Europe's biggest bank, is close to selling landmark offices in London, New York and Paris to boost its balance sheet by around $2 billion by end-2009, a person familiar with the matter told Reuters.

HSBC has been mulling offers to sell its premises on New York's Fifth Avenue, the Champs Elysees in Paris and London's Canary Wharf for several months, and is now in advanced talks with buyers on each asset with a view to striking deals within weeks, the source said.

Bids for the New York office have come in at between $350 million and $400 million, the source said. The London and Paris buildings have attracted offers of around $1.3 billion and $500 million, respectively, he said.

Exclusive bidders on each office could be named as early as the end of the week, the source said, without disclosing buyer identities.

HSBC and real estate advisor CB Richard Ellis started marketing the portfolio as a sale-and-leaseback investment opportunity in April.

CBRE declined to comment on the proposed sales. HSBC could not be reached for comment.

HSBC shares were trading 0.9 percent down by 1239 GMT.

BOOST

Like most banks, HSBC is keen to see how much cash it can potentially unlock from its operational real estate holdings while turbulence in global capital markets persists.

Lloyds Banking Group, which is majority-owned by the UK taxpayer, has also appointed property advisors CBRE and Jones Lang LaSalle to devise and execute a strategy to pump cash tied up in property back into its core business.

News of the progress on the sales scotches market chatter that HSBC was just testing demand for its offices and was unlikely to sell before a big rebound in global property prices.

It sold its iconic Canary Wharf skyscraper to Spain's Metrovacesa for 1.1 billion pounds ($1.75 billion) close to the top of Britain's real estate market in April 2007 before taking back possession last December after the property company failed to refinance bridging debt secured from HSBC to buy the tower.

It made a quick profit after buying the property back for 838 million pounds last December, but average UK commercial property prices have fallen by around 5 percent between December 2008 and July 31, threatening the bank's chances to achieve a sale at a similar level.

South Korea's National Pension Service is one investor linked with HSBC's London property. A spokesman for the organisation -- the world's fifth-largest pension fund -- said the NPS was interested in the asset but no detailed talks had taken place.

NPS appointed real estate investment manager Rockspring to take charge of its central London property acquisitions strategy less than a month ago.

The pension fund, which has around $200 billion in assets, plans to invest $3 billion in real estate in Tokyo, Sydney, New York and London in 2009. Rockspring declined to comment. Sphere: Related Content

BBVA Completes EUR 1.15 Billion Sale Leaseback of 948 Bank Branches and Office Buildings Across Spain

Financial Times - September 25 2009

BBVA, Spain’s second-biggest bank, on Friday completed one of Spain’s largest sale and leaseback deals after agreeing the €1.15bn ($1.6bn) disposal of almost 950 branches and other properties.

The bank said it would book an extraordinary gain of €830m on the deal, which it would assign to provisions against future bad loans. It is the latest of several similar deals, under which companies sell their own buildings to specialist funds and then rent them back. That deal comes as BBVA prepares a €2bn convertible bond issue.

The operations have provided one of the few bright spots in a severely depressed commercial property market in Spanish cities, where capital values have fallen by about 50 per cent in the past two years.

The best known transaction was that of Santander, BBVA’s main competitor and the eurozone’s largest lender. A year ago it completed the €1.9bn sale and leaseback of its huge purpose-built headquarters, complete with golf course, on the outskirts of Madrid.

The country’s smaller savings bank networks have also been looking for buyers to free up much-need capital, but property agents report that interest is generally limited to well-known names.

Iberdrola, Spain’s largest electricity group, also cast around for a deal on its Madrid headquarters before deciding against a sale.

BBVA said on Friday it had agreed a long-term sale and leaseback to Tree Inversiones Inmobiliarias, a subsidiary of Deutsche Bank’s RREEF Limited. The fund has acquired an initial 948 properties – mainly bank branches – but there were reports on Friday that it, or another buyer, might take on more later in the year.

BBVA, which was not hit directly by the US subprime crisis but faces rising bad loans in the domestic market, described the accord with Deutsche as “flexible”.

Most Spanish lenders have been closing branches and reducing full-time staff in response to the economic crisis. In keeping with this, special clauses in the leaseback deal will allow BBVA to vacate up to 6 per cent of the branches, and replace properties at present included in the deal with others. This would permit it “flexibility in the management of the network”, it said.

Many banks globally have been exploring real estate sale and leaseback programmes to increase capital, particularly those that have been forced to take government bail-out money.

The sale of real estate can have a strong benefit for a bank’s tier one capital ratio, a key balance sheet measure. Banks not in distress also see it as an easy way to raise cash. Few regard owning real estate as a core part of their operations.

Credit Suisse is selling a building in Canary Wharf, London, for example, and people close to the bank say that the sale of real estate was part of a longstanding strategy to focus on core banking operations. Sphere: Related Content

Enterprise Inns May Seek Sale Leaseback of 100 Pubs Across UK

The Publican - September 24, 2009

Enterprise Inns could offload a further 100 pubs through sale and leaseback deals if the seven sites it is looking to sell and let back at next month’s auction are snapped up by investors.

Earlier this week the pubco revealed it was putting seven London pubs on the market and said it hoped to raise up to £15m via a sale and leaseback arrangement.

The money raised would be used to pay down some of the company’s £1bn bank debt.

Ted Tuppen, Enterprise’s chief executive told The Publican the group had a small lease rental bill – around £3m annually – and could easily afford to pay the combined rent of £990,000 for all seven pubs.

“This is an attractive proposition for people with cash to invest, one that will get them a return of around six per cent a year with a blue chip company,” Tuppen said.

“It will also give a strong indication as to underpinning the value of the pubs on our balance sheet,” he added.

If the auction proved successful Tuppen said he could see up to 100 or so more Enterprise pubs being sold and subsequently leased back.

However some observers have criticised the rents being offered for the pubs as being unrealistic. One property expert said the investment community would “spot this deal for what it is; over-rentalised”.

However Tuppen was unfazed by such comments. “If the rents are deemed too high by potential investors then the pubs won’t sell,” he said.

Tuppen said the move to a sale and leaseback programme was just another way in which the pubco was looking at its financing arrangements.

Sources meanwhile suggested the group had exceeded the £100m proceeds it was looking to achieve through pub disposals during the year. Sphere: Related Content

State of California Seeking $2 Billion From Sale Leaseback of Several State Owned Office Buildings

Sacramento Bee - September 24, 2009

As the California economy roared in the 1990s and tax revenues poured into a treasury overseen by Gov. Pete Wilson, the state laid plans for a series of new office buildings in Sacramento to spare itself from paying rent to other landlords.

Barely a decade later, the Schwarzenegger administration is launching a process to sell many of the same buildings that were originally touted as long-term money savers for taxpayers. The goal today is more immediate: pay off debt and steer cash into the state's depleted general fund. It's among a variety of short-term crisis solutions that include selling surplus state property, moves also being undertaken in cash-strapped Arizona.

In California, 11 state-owned sites with an estimated value of almost $2 billion will be listed for sale in early 2010 to pay off about $1.4 billion in bonds and net another $600 million "to support other critical state government programs," said state Department of General Services spokesman Eric Lamoureux.

The state wouldn't move out of the buildings; it would continue to lease them from the new owners.

The sell-off has lit up the skies for brokers in an otherwise downcast office real estate sector, where few buildings are being bought, sold or even listed, especially in Sacramento. It's likewise called fresh attention to the state's battered finances and stirred banter about whether it's smart to sell long-term real estate assets for short-term goals in a weak market.

Many in the real estate industry acknowledge it's a close call, but believe "beautiful class A" state buildings with a single tenant will command premium prices.

"It's unfortunate they would sell them. But they definitely have a need for financing right now, for equity to solve this budget crisis," said Tom Aguer, president of Sacramento-based commercial real estate brokers Aguer Havelock Associates. "It's a very creative way for them to fix their problem. But in the long term, these are great assets."

Brokers like Aguer and others among the nation's leading real estate firms are already assembling proposals and lining up national teams to broker the sales. The state is demanding an experienced partner: a firm that has done five separate deals of $20 million or more in the past seven years, and at least $150 million in total deals in that span.

No one can calculate for certain the fees such a deal could bring a brokerage firm. But it's widely said in the industry that the higher the price, the lower the commission. Even a commission as low as one-quarter of 1 percent of almost $2 billion in sales could net a firm nearly $5 million.

Specifically, the state is proposing a so-called "sale/leaseback" deal in which buyers of state buildings would rent them to the state afterward.

"We intend to maintain 100 percent occupancy in the buildings just as we have today," said Lamoureux, whose department manages state buildings. "We're just looking to sell the property and lease back over an extended term, probably along the line of 20 years or so."

Brokers say the lease-back provision is likely to stir interest among risk-averse investors known in the trade as "coupon clippers." Those are big institutional investors such as pension funds and insurance companies.

"There are numerous buyers looking for single-tenant buildings with the long-term leases. It's a steady income. It's a low-risk deal," said Nico Coulouras, vice president in Sacramento for Lowe Enterprises, a Los Angeles-based development and investment firm.

Among the state complexes proposed for sale are some of Sacramento's biggest buildings and most distinctive landmarks: downtown's massive East End Complex next to Capitol Park, finished in 2003; the 17-story Attorney General Building on I Street, completed in 1995; and the sprawling 1.8 million-square-foot campus of the Franchise Tax Board, expanded earlier this decade at the city's eastern edge.

Elsewhere, fixtures of the Oakland, San Francisco and Los Angeles skylines – bearing names of politicians from Ronald Reagan to Hiram Johnson – will also be sold. Sphere: Related Content

Accor Completes EUR 272 Million Sale Leaseback of 158 Hotels

Accor Web Site - September 22, 2009

In line with its ongoing asset-right strategy, Accor today announced a major real estate transaction in the Budget segment in France, with the sale of 158 hotelF1 properties, representing a total of 12,300 rooms.

Accor pioneered the low-cost hotel concept in France, opening the first Formule 1 hotel in 1984 and introducing particularly innovative construction and management techniques. Formule 1, renamed hotelF1 in 2007, is the entry-level hotel brand of Accor Group in France with an average room rate of around €33.

Following the sale, Accor will continue to operate the 158 hotels under the hotelF1 brand, thereby retaining full control on pricing policy and product innovation process, which are essential to ensuring the brand’s sustainability. Since the end of 2008, about a hundred properties have been renovated as part of a vast refurbishment program, which includes the new Duo room concept (2 twin beds). The new offer is designed not only to consolidate the brand’s core base, but also to attract new customers.

This sale and variable leaseback transaction was carried out with a consortium of leading French institutional investors through a property investment trust (OPCI).

With the sale of the hotel units for €272 million, Accor signed a 12-year business lease, renewable six times at Accor’s option. The variable rents are based on an average 20% of revenue with no guaranteed minimum.

Based on 2008 revenue, the variable rent would have been €21.3 million (approx. 7.8% cap rate.) This transaction will enable Accor to reduce its adjusted net debt by approximately €187 million in 2009, of which €130 million will be added to the Group’s cash reserves. In addition, it will have a positive impact of roughly €5 million on profit before tax.

In a difficult economic environment, the transaction confirms the renewed interest of investors for hotel real estate, and particularly for the low-cost segment. Sphere: Related Content

UVIT Completes EUR 32 Million Sale Leaseback of Offices in Eindhoven

PropertyEU - September 17, 2009

Lloyd Fonds has acquired an office building in the Dutch city of Eindhoven for EUR 32 mln. The property was purchased in a sale-and-leaseback transaction from UVIT, one of the largest health insurance providers in the Netherlands. UVIT has a 15-year lease.

The asset is located in the Kennedy Business Centre in the city and is being contributed to 'Holland Eindhoven', the latest in a series of Lloyd funds for the Netherlands. Marketing for the fund begins later this year.

Based in Hamburg, Lloyd Fonds is a leading initiator of closed-end funds and structured investment products. The Company is predominantly active in two asset classes, namely transportation (shipping, aircraft and secondary-market shares) and real estate. To date, an investment volume totalling around EUR 4.5 bn has been realised. Sphere: Related Content

Tesco Completes $824 Million Sale Leaseback of 15 Retail Stores and Two Distribution Centers in the UK

Bloomberg - September 15, 2009

Tesco Plc, the world’s third- biggest retailer, is planning to issue about 500 million pounds ($824 million) of bonds secured by rental payments from its own stores and distribution centers.

The U.K. supermarket chain’s notes due in October 2039 may yield about 2.25 percentage points more than U.K. government debt, said a banker with knowledge of the transaction. The bonds will be issued through Tesco Property Finance 2 Plc, a company set up to sell the notes, with the rent backing the securities guaranteed by Tesco, Fitch Ratings said in a report today.

The sale and leaseback transaction is Tesco’s second public issue of commercial property-backed securities this year, and the third for any company in Europe since 2007, according to data compiled by Bloomberg. The Cheshunt, England-based retailer issued 431 million pounds of notes secured by rents in June, while U.K. property firm Land Securities Group Plc sold 360 million pounds of lease-backed bonds in July.

“It represents an example of an effective and simple use of securitization to meet both investor and issuer needs,” said Stefano Loreti, a London-based portfolio manager at Cairn Capital Ltd., where he helps to oversee $40 billion of asset- backed securities. “More deals of this kind will keep coming to the market.”

Prices for bonds backed by consumer debt, corporate loans and real estate have plunged as the credit crisis caused investors to shun hard-to-value assets. The yield over benchmark rates investors demand to buy top-rated commercial mortgage- backed notes in euros is about 7.73 percentage points, more than double the rate a year ago, Deutsche Bank AG data show.

Leaseback Transaction

Tesco’s transaction involves the sale of 15 retail stores and two distribution centers with a total value of about 500 million pounds, according to Tesco spokesman Tom Hoskin.

“Similar to our most recent sale and leaseback deal in June, this will be primarily funded by the issue of a fixed-rate note,” Hoskin said.

Fitch estimates Tesco may issue about 559 million pounds new notes, which it ranks at A-, the seventh-highest investment- grade rating. Standard & Poor’s also ranked the debt at A-.

Goldman Sachs Group Inc. is managing the sale of Tesco’s bonds. Sphere: Related Content

Bank of China Provides $120 Million Loan On New York Times HQ in Manhattan

National Real Estate Investor - September 9, 2009

How long does it take for a borrower to secure a first mortgage on 21 stories of the New York Times Building? After countless rejections by lenders, about six months, according to Ben Harris, managing director and head of domestic investments for W.P. Carey (NYSE: WPC). The New York investment firm announced today that it has closed a $120 million non-recourse loan on the landmark tower with the Bank of China.

“Overall, it’s very telling that W.P. Carey got the loan from the Bank of China,” notes Victor Calanog, chief economist with New York-based research firm Reis. It is telling because the China Investment Corp., a $300 billion sovereign wealth fund, is reportedly considering large investments in U.S. commercial real estate via the U.S. Public-Private Investment Program, or PIPP. China’s foreign reserves now stand at $2 trillion.

The deal began in early January when the financially troubled New York Times Co. announced plans to raise up to $225 million in cash by selling its portion of the 52-story Manhattan skyscraper in a sale-leaseback. At the time, industry watchers indicated that the plan had perhaps come too late for the beleaguered owner of The New York Times and the Boston Globe. The conventional wisdom was that even if willing buyers were to step forward, debt financing was largely unavailable.

Then in March, W.P. Carey closed the $225 million sale-leaseback in an all-equity deal that included two of its publicly held, non-traded REIT affiliates. The transaction with the Times Co. encompassed approximately 750,000 sq. ft. of rentable space. The leaseback terms include a 15-year lease period with a rental payment of $24 million for the first year, and escalating rents throughout the remainder of the lease.

Despite the deep pockets of W.P. Carey’s lender, securing a non-recourse loan in the current debt-restricted climate was not easy. “Typical commercial mortgage loan-to-values were 80% to 90% on assets like this in the heyday, and this is a 55% loan-to-value mortgage,” says Harris.

While specific details of the loan were not disclosed, Harris acknowledges that it falls within the range that W. P. Carey is seeing in today’s debt market of five to 10-year terms with interest rates based on spreads of 350 to 450 basis points over U.S. Treasuries.

Steve Kohn, president of Cushman & Wakefield Sonnenblick Goldman, which served as the exclusive advisor to W.P. Carey on the deal, agrees. "For a single lender, a loan of this size required us to focus on larger life insurance companies and major off-shore banks,” Kohn maintains. “Most lenders today need to syndicate loans over $50 million."

While the financing would likely have been easier to secure a couple of years ago and brought in much higher proceeds, W.P. Carey feels fortunate that it was able to acquire the Midtown Manhattan office space for approximately $300 per sq. ft. Excluding this deeply discounted sale, New York office properties on average traded for $800 to $900 per sq. ft. in the first quarter, according to Reis.

“The Bank of China is showing a very savvy strategy to come into the marketplace today and take advantage of a very thin competitive set where they can dictate terms and get great loans,” says Harris of W.P. Carey. Since September of 2007, the company has closed approximately $400 million in financing.

Calanog believes that many of the distressed sales over the past six months are the result of owners unable to cover debt service, many of whom have been weeded out of the market. Going forward, he says, there may be more pressure on U.S. buyers competing with foreign investors like China. Why? The Chinese investors are willing to accept less of a discount.

“If the Chinese can allocate their money wherever they want and they choose to invest in U.S. properties,” Calanog concludes, “that is a signal at least in the near term that values may actually increase and maybe they’ve bottomed out now.” Sphere: Related Content

National Amusements Weighs £100 Million Sale Leaseback of 16 UK Cinemas

Property Week - September 9, 2009

Investor could buy 16 outlets after usurping bidders with property-only offer

Delancey has emerged as THE frontrunner to buy a £100m-plus package of up to 16 cinemas from US media mogul Sumner Redstone’s National Amusements.

Bidders were lined up for the auction of Redstone’s UK cinemas in April when Citi was appointed as adviser to sell its property and operating assets in the UK.

Several cinema operators bid for the portfolio, including Cineworld and Israel Theaters, Israel’s largest cinema group.

But it is thought that Delancey made a bid directly to National Amusements offering to enter into a property-only transaction.

The deal would involve Delancey buying the freehold properties owned by National Amusements and leasing them back to the company, allowing it to remain in the UK and raise money through a property sale rather than an outright sale of the business.

Both parties have entered an exclusivity agreement.

The total UK assets of National Amusements were valued at more than $500m 18 months ago and total 21 cinemas – including 16 freehold venues. Experts suggest the price under discussion for the sale and leaseback could exceed £100m, reflecting a yield of around 8%.

National Amusements trades as Showcase Cinemas in the UK. This includes its high-end cinema operation Cinema de Lux, which it opened last year in Derby, Bristol and Leicester (above). National Amusements owns these three cinemas on a leasehold basis.

It was to open a fourth venue at Westfield London but, following its difficulties in the US, the plan was scrapped. Rival operator Vue has now signed up at the mall.

It is thought Redstone is selling the cinema chain to help pay down a $1.6bn debt pile and avoid having to sell shares in Viacom, the owner of cable channels MTV and CBS.

National Amusements breached banking covenants last October, but struck an agreement with lenders that involved the sale of some of its cinemas.

The cinema sector has performed well in 2009. Operators such as Cineworld have reported good trade and predict the second half of 2009 will improve further.

None of the parties would comment on the cinema transaction. Sphere: Related Content

CIMB Eyes Large Sale Leaseback of Bank Branches and Offices in Malaysia

Business Times - September 9, 2009

CIMB Group is eyeing sale-and-leaseback exercise for its properties, said group chief executive Datuk Seri Nazir Tun Razak.

"We are engaging a few potential buyers and they are financially, potential investors," he said.

According to Nazir, the transactions for all its buildings, especially CIMB branches and some other offices, would be completed by the fourth quarter of this year or the first quarter of 2010.

Early this year, the group had signed an agreement with Pelaburan Hartanah Bumiputera Bhd (PHBB) for the sale and leaseback of the new 630,000 sq ft 39-storey Menara Bumiputra Commerce. The group is now the sole tenant of the building, he said.

"The transaction with PHBB was worth RM460 million. On top of that, we spent about RM80 million for internal refurbishments," he told reporters after the opening of the building by Yang di-Pertuan Agong Tuanku Mizan Zainal Abidin today.

The Menara Bumiputra-Commerce, which cost RM400 million, was constructed by IJM Corp Bhd. It began in October 2004 and was completed early this year.

It will serve as the headquarters for commercial banking, franchises of CIMB Group, CIMB Bank and CIMB Islamic.

Nazir said the investment banking and capital market arm would be located in Menara CIMB, which was still under construction in Kuala Lumpur Sentral.

He said construction was expected to be completed in 2012.

Nazir said today also marked the completion of CIMB Group's multi-year branch re-branding exercise.

"South-East Asia's largest retail network of 1,150 branches across Malaysia, Indonesia, Singapore and Thailand have now all assumed the CIMB icon, its red and green colours and consistent branch look and feel," he said. Sphere: Related Content

Co-operative Group Sale Leaseback - Update

Crain's Manchester Business - September 7, 2009

The Co-operative Group is on the verge of selling the freeholds to 20 of its stores for £40m as part of a sale and leaseback deal, Crain's has learned.

Property investor Threadneedle is within days of finalising the deal which has been in the pipeline for months, according to sources familiar with the situation.

The London-based fund, which is owned by New York Stock Exchange listed Ameriprise Financial, is buying the freeholds for cash and will lease the properties back to the Co-op for 25 years at rents linked to inflation.

Threadneedle and LaSalle Investment Management were whittled down from eight bidders in the race to land the properties, which are spread throughout the UK.

A source familiar with the situation said: “It's one of the biggest deals at the moment. The Co-op are just trying to raise a bit of cash.”

The stores have been in Co-op hands for decades in some cases and are not among those recently acquired as part of the £1.6bn acquisition of Somerfield in 2008.

In its latest accounts for the year to the end of January the Co-op said it was aiming to sell £175m of “surplus properties” over the next three years.

A note in the accounts says: “Disposals are particularly important as they realise capital that can be invested in other group projects.”

Last year the Co-op made a profit of £20m on property sales which raised a total of £58.4m. It said this was “well ahead of target” but some observers of the property scene have raised eyebrows about the decision to make large scale disposals at a time when asset values have been falling. The capital value of the Co-op's investment portfolio dipped by £62.3m in the year.

The Co-op owns land and buildings worth a collective £1.6bn, not including investment properties, and the sell-off comes at a time when other parts of the group, in particular the expanding food and financial services businesses, require more capital.

The group needs cash for a £100m rebrand of its stores, which began last year, and is planning a £100m project to build a new headquarters on Manchester's Miller Street. Sphere: Related Content

Mayor Brown DC Headquarters Sold for $208 Million

CPExecutive.com - September 3, 2009

In Washington, D.C.--which was named the best urban real estate market in the world by the likes of the Association of Foreign Investors--Germany-based DekaBank Group’s recent $207.8 million acquisition of the newly developed 250,000-square-foot 1999 K Street office building came as little surprise to many, even given the slow investment market nationwide.

Vornado Realty Trust sold the property in an off-market deal to the DekaBank Group, which is the largest provider of open-ended property funds in Germany. The two investment companies, Deka Immobilien Investment GmbH and WestInvest Gesellschaft für Investmentfonds mbH, together manage fund assets of more than EUR 19 billion.

The building was designed by internationally recognized architect Helmut Jahn and achieved LEED-CS gold certification.

Designed by Helmut Jahn and recently awarded a LEED-CS Gold certification, the office property was completed in August and serves as the new headquarters for the law firm Mayer Brown. The building is 100 percent pre-leased to the law firm, which occupies the entire 12-story building as part of a new 15-year lease. In addition, TD Ameritrade occupies a 5,000-square-foot retail unit on the ground floor. Vornado will continue to manage the property.

“I’m not surprised by this deal. This is a trophy quality asset and the prices were on target. There is alot of liquidity in the marketplace and we’re seeing more activity,” Collins Ege, managing director for Jones Lang LaSalle, told CPE. “There is more activity going on in Washington, D.C. We’re closing a transaction this week and we’re probably busier now than we have been in the last 12 months. We have four deals under contract and we’re seeing other deals in development.”

A deal like this demonstrates that the Washington, D.C., area is a good location and still a viable marketplace, he added.

The $207.8 million sales price is $830 per square foot and is a first year cash cap rate of 6.3 percent. Vornado realized a net gain of approximately $41 million and received net proceeds of approximately $90 million after repaying the existing loan and costs.

CB Richard Ellis Inc.'s buy-side investment advisory group, Global Property Advisors, with the support of the firm's Washington D.C., Capital Markets team, represented Deka in the transaction. Sphere: Related Content

Finnair Completes EUR 77 Million Sale Leaseback of Four Properties Near Helsinki-Vantaa Airport

PropertyEU - August 20, 2009

Property broker Newsec has advised Finnair Group's facilities division in the sale-and-leaseback of four properties in the vicinity of Helsinki-Vantaa Airport for EUR 77 mln.

The assets were sold to NV Property Fund I Ky.

The properties comprise Aircraft Hangar 7, the Ground Handling Fleet Centre, the Ground Equipment Maintenance Unit and the Training Centre. The properties will be leased by Finnair Facilities Management Oy and the users of the facilities are various business units of Finnair. The leased area totals around 60,000 m2.

The transaction was part of a financing programme announced earlier by Finnair. 'We see NV Property Fund I Ky as a reliable and desired long-term partner. We are very pleased with the cooperation within all parties in the arrangement,' said Mika Stirkkinen, Group treasurer of Finnair.

Newsec said the acquisition was also a significant step for the fund of NV Kiinteistösijoitus, as the volume of its investments increase to over EUR 300 mln. 'We are privileged to have such a remarkable actor, as Finnair is, as a tenant. The properties with long net lease agreements represent the general focus of our fund,' said Kari Louhenkilpi, the managing director of NV Kiinteistösijoitus

The fund is owned by Nordea Life Assurance Finland Ltd (45%), Varma Mutual Pension Insurance Co (45%) and the State Pension Fund (10%). Sphere: Related Content

Syngenta Seeds HQ Near Minneapolis Sold for $28.4 Million

Minneapolis / St. Paul Business Journal - August 17, 2009

Opus Northwest on Monday sold a newly built Minnetonka office building for about $30 million to CB Richard Ellis Realty Trust, a firm based in Princeton, N.J., according to a Securities and Exchange Commission filing.

The 116,300-square-foot building, called Crest Ridge Corporate Center I, is leased to Syngenta Seeds Inc., a division of Basel, Switzerland-based Syngenta International. Syngenta's lease runs through June 2019.

CB Richard Ellis Realty Trust said in the filing that it bought the building, at 11055 Wayzata Blvd., for $28.4 million plus closing costs.

The building and its attached 430-stall parking ramp is at the southeast quadrant of Hopkins Crossroad and Interstate 394. Work was finished on the building in June.

Syngenta is moving about 250 workers into the building from various sites around the Twin Cities, including its former headquarters on Highway 55 in Golden Valley. It has about 500 workers in the state, according to a spokesman for Syngenta.

Opus Northwest is marketing Phase II of the corporate center on an as-yet undeveloped, similar-sized adjacent site.

Opus Northwest is a division of Opus Corp., also based in Minnetonka, which has had some of its other regional divisions around the country file for bankruptcy amid a national downturn in the market for commercial real estate.

The property was marketed for sale by Tom Holtz and Steven Buss from the Bloomington office of CB Richard Ellis.

This is the second notable purchase in the Twin Cities by CB Richard Ellis Realty Trust this summer. In July, it bought an industrial building in Rogers that is leased to Deerfield, Ill.-based Walgreen Co. for $15.34 million.

(Note: SEC Edgar prospectus supplement dated August 17, 2009 filed by CB Richard Ellis Realty Trust estimates that the acquisition cap rate for the Crest Ridge property was 8.7%.) Sphere: Related Content

Credit Suisse Nearing £150 Million Sale Leaseback of Canary Wharf HQ

Property Week - August 7, 2009

An investment company backed by the former prime minister of Lebanon is in pole position to carry out a purchase and leaseback of one of Credit Suisse’s buildings in London’s Docklands.

M1 Real Estate is leading a consortium of Lebanese investors that is thought to have placed the 258,314 sq ft 20 Columbus Courtyard under offer for more than £150m – a yield of less than 6%. Credit Suisse will lease back the property for 25 years.

M1 Real Estate is a Monaco-based property company and an affiliate of parent company M1 Group, which was founded by the former Lebanese prime minister, Najib Mikati, and his brother.

The deal is another example of overseas investors believing the UK offers good value. This week an Australian fund has placed under offer a stake in the Bullring, Birmingham, and a German fund has bought Centrium in London’s Midtown.

M1 Real Estate has made other investments in central London. In March, it bought the Times Place building at 45 Pall Mall in London’s West End from Legal & General. It paid £56.5m, entirely in equity, for the 60,000 sq ft property at a net initial yield of 7.5%.

Credit Suisse has been assessing its sale-and-leaseback options on all of its buildings in London’s Docklands for more than three years.

In May this year it instructed CB Richard Ellis to market 20 Columbus Courtyard in a process dubbed ‘Project Hunter’. The guide price was around £147m, reflecting an initial yield of 6.25%. It offered the building on a freehold or long-leasehold basis with a guaranteed 25-year lease to Credit Suisse Securities.

The tenant has two options to extend the lease for five years. The rent will be reviewed annually on a Retail Prices Index-linked increase with a ‘cap and collar’ maximum and minimum increase of 4% and 1.5%, respectively. The current rent is £37.50/sq ft.

Credit Suisse received 20 formal bids from parties attracted by the size of the property and the guaranteed rent rises.

The purchase and leaseback is thought to be part of M1’s long-term strategy to build a global portfolio of prime assets in large cities.

Moustapha El-Solh, chief executive of M1 Real Estate, said after the purchase of Times Place that, ‘although the London real estate market, like many cities around the world, is currently seeing one of its worst downturns, we believe that making investments in prime assets with strong fundamentals is a sound long-term strategy.’

M1’s portfolio includes investments in the US, Europe and the Middle East.

Credit Suisse is also considering the sale and leaseback of other buildings it owns in London’s Docklands. Sphere: Related Content

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

Arizona Republic - July 29, 2009

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Property Week - July 28, 2009

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

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

Real Estate Finance & Investment - July 17, 2009

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

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

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

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

CSP Daily News - July 17, 2009

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

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

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

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

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

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

Prospective investors are invited to contact CBRE at 407-404-5000 or http:/www.cbre.com/racetracportfolio/ Sphere: Related Content

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

PropertyEU - July 17, 2009

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

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

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

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

Property Week - July 17, 2009

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

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

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

Property Week - July 17, 2009

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

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

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

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

Sale-Leaseback Sticker Shock

Wall Street Journal - July 15, 2009

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

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

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

PIC Seeking Sale Leaseback of Five Hypermarkets in Romania

Ziarul Financiar - July 14, 2009

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

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

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

Winston Salem Journal - July 14, 2009

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

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

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

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

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

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

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

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

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

Trading Markets - July 1, 2009

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

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

SEC Edgar Web Site - June 30,2009

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

CVS Caremark Completes $480 Million Sale Leaseback of 122 Drug Stores Across US

Standard & Poor's - June 26, 2009

Standard & Poor's Ratings Services today assigned its BBB+ rating to CVS Caremark’s $478.8 million 8.353% pass-through certificates due 2031. The certificates are secured by mortgage loans totaling approximately $478.8 million, encompassing 122 drug stores leased to subsidiaries of CVS Caremark Corp. (BBB+).

The rating reflects the credit quality of CVS Caremark Corp., which unconditionally guarantees the tenant's lease obligations. The transaction was evaluated as a credit-tenant loan and is dependent on the credit rating on CVS Caremark Corp. Any change in the rating on CVS Caremark Corp. will result in a change in the rating on the pass-through certificates. Sphere: Related Content

WP Carey Mulls Sharia Compliant Sale Leaseback Fund

Reuters - June 23, 2009

U.S. real estate financing company W.P. Carey (WPC.N: Quote, Profile, Research, Stock Buzz) is mulling a plan to launch an Islamic compliant fund, a plan first spawned in 1997, as part of its global fundraising efforts, its president said on Tuesday.

Edward LaPuma told the Reuters Global Real Estate Summit the company had set up an Islamic-compliant fund in the late 1990s, which had attracted interest in the Middle East. The company eventually abandoned the launch because the amount of money committed outweighed the opportunities available in the market at that time, LaPuma said. However, as the volume of exciting deals carved out of the deep property market correction continues to grow, LaPuma said a new fund launch was now a much more appealing prospect.

"I think there is a possibility (to launch the fund), and the possibility is better than 50-50," he said. The firm, which has about $600 million in cash, is looking to raise $1 billion to fully exploit a wealth of new market opportunities. Inflows from U.S. investors remain healthy, but the firm is keen to broaden its capital base, LaPuma said, and bolster the $2 million to $3 million generated each day from wealth management companies.

Islamic finance avoids sectors such as alcohol, pornography and weapons, which it regards as forbidden. It also rules out unnecessary risk-taking and demands low leverage. W.P. Carey's business model, which specializes in sale and lease-back activities, potentially conforms to the Islamic principle that demands business transactions be backed or based by tangible assets, such as real estate.

The fund idea proposed in 1997 would have deployed the investors' cash in the U.S., although a new fund would deploy cash in other countries, LaPuma said.
"The Middle East is an area we would like to be, governments are solvent and companies there are very financially stable companies. So for our business are a lot of opportunities," he said. W.P. Carey, however, would be selective in its acquisitions. "The Middle East seems to be getting lumped together as a group, which does a disservice to the region because there certainly are areas that would be much more interesting than ours.

"One thing I have on my agenda is to spend more time trying to understand those various markets and being able to drill down to country level," LaPuma said. Sphere: Related Content

WP Carey Seeks to Raise $1 Billion to Pursue Sale Leaseback Deals in Europe and Emerging Markets Worldwide

Reuters - June 23, 2009

U.S. real estate financing firm W.P. Carey (WPC.N: Quote, Profile, Research, Stock Buzz) is looking to raise $1 billion of capital to fund its expansion into European and emerging property markets, its president and international transactions head told Reuters.

"We have many more opportunities outside the U.S. ... I would like to see us do $500 million of deals in Europe in 2009 and that is very realistic," Edward LaPuma told the Reuters Global Real Estate Summit on Tuesday.

"I'd like to do $1 billion but we're doing a lot of all-equity deals at the moment and that really puts a ceiling on things," he said, adding the firm has about $600 million of cash on deposit.

The fundraising plans represent the firm's first active cash call since 2006-2007, when it stopped seeing investment opportunities that were worth splashing out on.

LaPuma said the plans were devised to fully exploit an impending $10 billion to $12 billion wave of real estate disposals from European corporate occupiers, who were considering cashing out of their property as traditional sources of capital dried up.

"I don't know how many large principals shut down fundraising in those years, but if you didn't you had to put the money to work and a lot of deals were done in that period that didn't make a lot of sense," LaPuma said.

"But in today's market, we are seeing more deals than I have seen in the last 15 years. Companies are really being forced to consider financing alternatives," he said. The "sale-and-leaseback" specialist, which in March sealed a $225 million deal to buy and lease back part of the Manhattan headquarters of the New York Times newspaper (NYT.N: Quote, Profile, Research, Stock Buzz), is also scouting opportunities in Brazil, the Middle East, India and China, where LaPuma hoped to conclude the firm's debut deal soon.

"We have been trying to do a deal there (in China) for some time but it is complicated. More people who go there lose money than make money," he said.

"Before the end of the year we will target a few other places we want to be in," LaPuma added, citing Southeast Asia as another particular region of interest.

WP Carey, which has offices in New York, Amsterdam, London and Shanghai, recently closed a $25 million deal in Malaysia, will finalize a $30 million deal in London and a $100 million deal in Hungary in the next week, LaPuma said.

PORTFOLIO SHIFT

The firm, which holds 70 percent of its $10 billion to $11 billion portfolio in the United States, expects its exposure to Europe and emerging markets to rise to 50 percent from 30 percent in the future.

In the meantime, LaPuma said the team was striving to deflect losses inflicted by the biggest banking and property sector meltdowns seen for generations in its core U.S. market.

"We take on corporate credit risk, and as companies are having a more difficult time, we have seen our corporate default risk increase by probably around 400 percent since the beginning of last year," LaPuma said.

"But we have done a good job to manage this, we still have a vacancy rate of around 1 percent across all our funds," he said.

LaPuma said he expected a slow recovery for the U.S. commercial real estate market, largely because of the colossal burden of real estate mortgages weighing on bank balance sheets.

"The last real estate bubble was really developer driven and then they didn't have users for the property. This time there are users for the property, but people paid too much," he said.

"I think you're probably less than halfway through (the U.S. slump) but I don't think it will get a lot worse, I just don't think the recovery will come that quickly." Sphere: Related Content

AIB Seeking EUR 20 Million Sale Leaseback of Seven Bank Branches in Ireland

Independent - June 17, 2009

AIB is seeking to raise a further €20m from its real estate portfolio through the sale and leaseback of seven prominent branches around the country.

The bank has instructed CB Richard Ellis to sell its branches in Swords, Navan, Dundalk, Monaghan, Kells, Castleblaney and Maynooth on a sale and leaseback basis.

AIB has unlocked over €1bn in shareholder equity for its core business activities since the sale of AIB Bankcentre in Ballsbridge in 2005/2006 and it has sold 40 branches.

The latest tranche follows on from the recent sale of three branches in Dublin, Naas and Mullingar. All the branches will have 20 year leases with AIB and a break option in year 15. The initial rents will be subject to upward only reviews at five year intervals.

"Since the programme started yields have moved out significantly," Colm Luddy of CBRE comments.

Demand

"However, demand in the investment market is for long leases to strong covenants and these investments will offer investors good value and very secure income."

The Navan AIB premises is expected to make €5m and off a rent of €335,000 will yield 6.5pc. The Dundalk branch will be rented at €239,000 and is valued at €3.4m again yielding 6.5pc.

Swords is expected to make €3.4m too and off a rent of €248,000 will provide in excess of 6.5pc. Maynooth will have a similar yield off a rent of €235,000 and a €3.33m. price.

The Monaghan branch will be leased at a rent of €200,000 and is expected to sell for in excess of €2.7m yielding in excess of 6.5pc as well.

Castleblaney will have an initial rent of €86,000 and is expected to achieve in excess of €1m, yielding over 7pc. The Kells property will offer a similar yield with a rent of €84,000 and a price in the order of €1m.

Another AIB branch in Cork City has been for sale for some months. Sphere: Related Content

Xerox Seeking Sale Leaseback of US Properties

Democrat and Chronicle - June 19, 2009

Xerox Corp. is looking to sell the 29-story, 850,000-square-foot Xerox Square building on South Clinton Avenue as well as the adjacent auditorium, its Jefferson Road facility in Henrietta and a building at its manufacturing and research campus in Webster.

Xerox hasn't set an asking price for the tower.

The sales represent the latest step in a strategy the company has pursued for two years of shedding excess space and moving into leased facilities.

About 1,500 people work at Xerox Square, a significant part of the company's 7,000-member local work force. Xerox doesn't plan to move the employees from the building but instead is pursuing a lease-back arrangement in which it would rent the building from a new owner, said spokesman Bill McKee.

"There's no intention to leave the Square," McKee said. "Xerox is committed to downtown Rochester."

The auditorium, which is serving as a venue for the Rochester International Jazz Festival, might be sold as part of Xerox Square or separately, McKee said. Along with the purchase of Xerox Square comes its underground parking garage.

Lease-back arrangements are common in corporate real estate. Companies typically decide that the money they get from the sale can provide a higher return than the added cost of having a landlord, said Larry Glazer, CEO of Rochester-based real estate development company Buckingham Properties.

"It gives them working capital to pay off debt or invest in and grow the company," said Glazer, who isn't involved in the current sales.

Xerox in 2007 sold its headquarters building in Stamford, Conn., and moved to leased space in nearby Norwalk. And in the past year it moved operations in Paris and Mexico City to leased facilities and relocated about 200 workers from leased space at Linden Oaks Office Park to Xerox Square.

Brokering the downtown sale is real estate giant Cushman & Wakefield, based in New York City. Xerox is handling the sale of the 440,000-square-foot Henrietta facility and Building 205 at the Webster campus.

The Jefferson Road site houses 1,250 workers and is used primarily for engineering work. Those workers likely would be moved to the Webster campus, McKee said.

Building 205 in Webster contains office space. Work done there would be moved to other Xerox properties. Sphere: Related Content