Assystem HQ in France Sold for EUR 40 Million

Europe Real Estate - February 23, 2007

For its DEGI INTERNATIONAL fund, the real estate investment manager DEGI Deutsche Gesellschaft für Immobilienfonds mbH is investing around €40 million in an office project in Saint Quentin en Yvelines within the metropolitan region of Île-de-France.

In a sale-and-lease-back procedure, DEGI is acquiring the project development package, fully let in advance, from the subsequent user Assystem, a leading international group in the field of engineering and innovation consultancy.

The L-shaped building, with a total area of 11,088 m², is accessed by two core areas, and features five floors above ground plus a two-story underground car park and a restaurant for employees. Divisible stories would enable the property also to be let in small sections. Completion of the office building is scheduled for the third quarter of 2008.

The location is conveniently situated for transport access: 200 metres away is a station connecting to the suburban railway network (RER) of the Paris metropolitan region. The slip-roads to the A12 and A13 motorways are about one kilometre away. Sphere: Related Content

Wyndham Worldwide Signs 15 Year Lease For New HQ Office Building

NJBIZ.com - February 22, 2007

Mack-Cali Realty (NYSE: CLI) in Edison today said it was selected by Wyndham Worldwide (NYSE: WYN) to develop the hospitality company’s new corporate headquarters. The three-story, 250,000-square-foot office building will be built on Sylvan Way at the Mack-Cali Business Campus in Parsippany.

Wyndham has already signed a 15-year lease on the building, according to Mack-Cali. Parsippany-based Wyndham currently occupies 1 Sylvan Way, 7 Sylvan Way and 10 Sylvan Way at the campus. It will continue to occupy space at 7 Sylvan Way; however, the other locations have been leased, says Mack-Cali.

Financial terms of the deal were undisclosed. HLW International will serve as lead architect on the project. Sphere: Related Content

EnCana Signs $1.1 Billion Build-to-Suit For Calgary HQ

Business Edge News Magazine - February 23, 2007

EnCana Corp. (TSX:ECA) has turned over its $1-billion-plus Bow office-tower project to H&R Real Estate Investment Trust (TSX:HR.UN) and signed a 25-year lease on all of the landmark 59-storey building. The natural gas and oilsands company said it received $70 million on the sale, and this amount "largely represents EnCana's investment to date."

The lease, described as the largest single-tenant lease in Canadian history, carries an initial rental rate of about $36 per square foot for "state-of-the-art office space in the Calgary market" upon the project's completion, scheduled for 2011.

The sale includes the development plans and contracts for the 1.9-million-sq.-ft. building on the north block between 5th and 7th Avenues between Centre and 1st Streets S.E., which will be the tallest office building in Western Canada, and the 200,000-sq.-ft. development on the south block.

The crescent-shaped north block building is budgeted at $1.1 billion, with construction to begin this summer. The development is intended to consolidate EnCana's current office space spread over five downtown Calgary buildings. Sphere: Related Content

Iris Hotel Group Completes $300 Million Sale leaseback of Australian Hotel Portfolio

Jones Lang LaSalle Web Site - February 21, 2007

Jones Lang LaSalle Hotels is delighted to announce the sale of the Iris Hotel Group on a sale and leaseback basis to T W Hedley Pty Ltd for approximately $300 million. John Musca, Senior Vice President, Jones Lang LaSalle Hotels, was the exclusive agent who negotiated the transaction.

The portfolio sale included The Cabramatta Inn, Eastwood Hotel, Canterbury Hotel, Revesby Pacific Hotel, Bankstown Club Hotel, Wattlegrove Club Hotel, Mount Annan Club Hotel, Campbelltown Club Hotel and Leumeah Club Hotel. Iris will retain ownership of four other hotels in the Group.

“With over 34,500m2 of land area across the portfolio, the nine hotels also include a number of DA’s for further development and/or box-format retail liquor opportunities,” said Mr Musca.

The Hedley Group acquired the hotels with 45-year leases in place and will retain the ownership of the hotel licenses and 238 gaming machines at the venues. “The sale highlights the continued corporatisation of Australia’s pub investment market and demonstrates the value the financial markets place in the separation of the freehold assets and income streams,” said Mr Musca.

Investment activity in Australia’s pub market continues to maintain its strong momentum. Unprecedented levels of transaction activity and investor interest were reported in both NSW and Queensland during 2006, surpassing sales activity recorded during 2005. Sphere: Related Content

Toll Brothers HQ Near Philadelphia Sold for $44 Million

Philadelphia Business Journal - February 21, 2007:

The office building where Toll Brothers Inc. makes its headquarters has changed hands. Compson Holding Corp. sold the 203,000-square-foot, suburban Philadelphia building to an undisclosed Atlanta-based private investor for $43.95 million, said Michael Comparato of Compson.

Compson of Boca Raton, Fla., bought the building at 250 Gibralter Road in Horsham, Pa., in October 2004 for $38 million. Toll, a luxury homebuilder, occupies the entire building and has a lease through October 2019 with an option to extend it another 15 years. Toll initially bought the building in early 2004, gutting and totally renovating it, and relocated its headquarters from nearby Huntingdon Valley, Pa.

For Compson, a private family company, it was time to sell. "When the price is right, the price is right," Comparato said. Sphere: Related Content

Sotheby's Manhattan HQ For Sale for $500 Million

MSN Money / Financial Times - February 18, 2007

Sotheby's in New York, one of the world's most glamorous auction houses, is itself coming up for sale with an asking price of about $500m

It is understood that RFR Holding, the private property company that owns the building at 1334 York Avenue on Manhattan's Upper East Side, has hired agents Jones Lang LaSalle to sell the property.

Sotheby's, which was set up in 1744, has been in New York for nearly 100 years and will remain at the site as a tenant of the new owner.

Sotheby's bought the site for just $11m in 2000. But the auction house has spent $140m on a giant makeover that increased it from four floors to 10 and created a total of 470,000 sq ft of space. Architects Kohn Pedersen Fox, which oversaw the redevelopment, replaced the building's old granite front with glass in various degrees of transparency, creating what one tourist guide now calls an "ethereal box".

RFR bought the building for $175m in 2002 in a sale-and-leaseback under which Sotheby's would remain for up to 40 years. The New York property company subsequently brought in Sachsenfonds, a German fund, as an investment partner.

In the past five years, property values in New York – and globally – have soared, pushing cap rates (yields) down to record lows, prompting the sale. Sphere: Related Content

Rex Stores Agrees to $84 Million Sale Leaseback of 94 Stores

BusinessWeek - February 13, 2007

Rex Stores Corp., which operates stores selling consumer electronics and appliances, on Tuesday said it agreed to sell 94 of its current and former store locations for about $84 million to Coventry Real Estate Investments LLC.

The company will also lease back at least 40 of the properties for an initial lease term expiring Jan. 31, 2010. The leases will contain renewal options for up to 15 additional years. Rex is still determining which properties it will lease back from Coventry, which are worth about $66.5 million on its books.

Rex plans to use proceeds from the sale to pay off about $17 million to $19 million in mortgage debt related to the properties, fund alternative energy projects and for other general corporate purposes. The company expects to close the deal April 30. Sphere: Related Content

Polimoon Closes $44 Million Sale and Leaseback of Properties in Norway and Denmark

HUGIN Online - February 12, 2007
Norwegian Plastics firm Polimoon has concluded the sale and leaseback of the three properties in Norway and one property in Denmark to a property fund established by Orkla Finans at what is considered favorably terms.

The gross proceeds were 270m NOK, generating a gain of 180 mNOK prior to tax and any fair value assessments. After payment of tax the net cash proceeds are approximately 240 mNOK. The rent, through a 15 year agreement is 19 mNOK annually and subject to a fixed 2% indexations.

After the sale and leaseback Polimoon is still a substantial owner, with 17 properties in excess of 140.000 square metres under roof. Sphere: Related Content

Accor Agrees to £439 Million Sale Leaseback of 30 UK Hotels

CatererSearch - February 12, 2007

French hotel operator Accor has negotiated a sale-and-leaseback deal on one-third of its UK portfolio. It has agreed heads of terms to sell 30 hotels to Land Securities Trillium (LST), the property partnership business of Land Securities Group. The sale is worth £439m and LST has pledged to inject around £35m in cash over the next four years to improve the properties.

Land Securities Trillium will lease the hotels back to Accor on 84-year leases and charge a rental income based on an agreed percentage of turnover. Based on their 2006 performance, the 30 hotels would have generated an annual gross rent of more than £27m. The hotels involved are mostly city centre properties operated under the two-star Ibis and three-star Novotel brands, with a strong weighting towards London.

“This partnership, as part of Accor’s real estate management strategy, will allow Accor to accelerate its expansion plan in the UK and de-risk its operational structure by moving to a fully variable lease arrangement,” commented Jacques Sterm, chief financial officer at Accor. Sphere: Related Content

Max Bahr Completes EUR 750.9 Million Sale Leaseback of German DIY Store Portfolio

ABN AMRO Web Site - February 7, 2007

The Structured Real Estate Capital team at ABN AMRO has successfully closed a EUR750.9 million secured real estate finance deal in Germany. The facility is provided by ABN AMRO to a joint venture Special Purpose Vehicle with equity participation from Moor Park Capital Partners and Praktiker. It will debt-finance the purchase of Max Bahr, the eighth biggest DIY house in Germany.

The transaction worked as an Opco/ Propco structure splitting the operational side of Max Bahr from its properties. Praktiker, the number two DIY business in Germany, purchased the operations side of the business. Moor Park, a real estate advisory team led by three ex-Nomura International directors, purchased the property through the ABN AMRO debt finance facility and will lease it back to Praktiker. The Propco consists of approximately 101 properties.

As part of this landmark deal, Praktiker structured 20 year triple net leases with the Propco on the majority of the Max Bahr real estate portfolio. The rent received will be used to service the ABN AMRO debt. Sphere: Related Content

J Sainsbury Ponders £7.5 Billion Sale Leaseback of UK Store Portfolio

The Guardian - February 5, 2007

J Sainsbury could consider selling its huge property portfolio to fend off a takeover if last week's interest from private equity turns into a formal approach.

According to reports over the weekend, Sainsbury's and its bankers Morgan Stanley may see a sale and leaseback as one way to guard against a takeover although sources close to the company last night questioned the longer-term logic of such a move.

Last week Sainsbury's stock market value soared by more than £1bn as three of the biggest private equity groups revealed they were considering a bid. Its shares leapt 14%, by 61.75p to an eight-year high of 507p on Friday, taking its stock market value to £8.7bn.

In a statement to the stock exchange CVC, Blackstone and Kohlberg Kravis Roberts said they were only at the "preliminary stages" of assessing a bid. There has also been speculation of a possible rival bid from Texas Pacific, another private equity group. Sainsbury's has said only that it "noted" the CVC statement and that no proposal had been received.

One attraction for the consortium is Sainsbury's property portfolio. The 750-strong chain has property estimated to be valued at £7.5bn. One option could be for Sainsbury's to beat the private equity bidders to it and sell off the property itself. Sphere: Related Content

Icon Nearing EUR 80 Million Sale Leaseback on Dublin HQ

The Post - February 4, 2007

The sale of Icon’s headquarters in the South County Business Park in Leopardstown, Dublin 18, will probably be complete by the end of the week. However, rumours that a technology entrepreneur had bought the buildings are untrue.

Icon, the clinical research organisation, is expected to secure up to €80 million for the four new office blocks and its existing headquarters. That selling price would reflect a yield of 4.75 per cent.

The company is to build four four-storey office blocks linked by a glass atrium to the existing headquarters building on the site. That will extend the total size of the facility to 15,868 square metres on a site which measures just over 4.5 acres. The first of the blocks is due for completion next month.

Under the terms of the sale and leaseback, the rent payable by Icon will equate to between €247 and €258 per square metres and in addition it will pay €1,000 annually for each of the 338 car parking spaces. The leases are for 20 years with upward-only rent reviews and a break option in year 15. Sphere: Related Content

LG Electronics Signs Long Term Lease for 750,000-SF Distribution Center in NJ

Commercial Property News - February 2, 2007

In one of New Jersey's biggest single industrial leasing deals in the last 12 months, distribution facilities provider ProLogis has signed on LG Electronics Inc. to occupy a 740,000-square-foot building in South Brunswick. The Central New Jersey warehouse (pictured) will serve as a northeast distribution center for LG products.

Sited off Interchange 8A of the New Jersey Turnpike, LG's new building was developed by ProLogis in 2005. The warehouse boasts a location with easy access to the bustling Port of New York/New Jersey and Newark Liberty International Airport.

Trammell Crow Co. represented LG in the lease transaction, while ProLogis relied on internal representation. Specific terms of the triple net lease were not disclosed; however, the fourth quarter average asking rate for industrial space in the 8A submarket was $4.89 per square-foot, triple net, as per a report by real estate services firm Colliers Houston & Co.

For LG Electronics, the lease allows the company to consolidate two facilities under one roof, and to expand its total square footage in the market. As for the length of the lease, Loosmann described it as a "commitment by LG to the Central New Jersey market on a long-term basis." Sphere: Related Content

Swiss Re Enters $1.18 Billion Sale and Partial Leaseback on London HQ Tower

The Times - February 2, 2007

A niche Mayfair-based investment bank has intervened in the £600 million ($1.18 billion) purchase of London’s Swiss Re Tower, better known as the Gherkin. The 180m (590ft) building at 30 St Mary Axe is set to be the UK’s most expensive office block after its owners, Swiss Re, secured a deal with IVG Asti-cus, the German investment firm, in December. But Evans Randall is poised to take a half share in the 40-storey skyscraper after setting up a joint venture with IVG.

The Gherkin, designed by Lord Foster of Thames Bank, and opened in April 2004 to widespread critical acclaim, is the ultimate in landmark acquisitions. The building is also occupied by an array of reliable and high-profile tenants, including Swiss Re, which has the 15 bottom floors. It is thought that the insurer is taking a 25-year lease on the building. Other tenants include Allianz, the German insurer and Coutts, the private bank.

Evans Randall usually underwrites each deal itself with high levels of gearing then sells equity stakes to a network of wealthy investors. Selling the Swiss Re Tower at £600 million represents a yield of about 4.75 per cent, reflecting the strength of investor demand for City offices. The highest price to date for a single office building is the £520 million paid last January for CityPoint, a 36-storey tower on Ropemaker Street, at a yield of 5.8 per cent.

Evans Randall and IVG are being advised by CB Richard Ellis and Knight Frank. Sphere: Related Content

Ottawa Seeking $1.5 Billion Sale leaseback of Federal Buildings

The Globe and Mail - January 31, 2006

Ottawa is preparing to sell $1.5-billion worth of office properties across the country as part of the first phase of a plan that will see dozens of federal buildings go to the private sector with the government as a long-term tenant, sources say. Sources in Toronto and Ottawa said nine buildings are likely to go in the first phase of the sell-off, including properties in Vancouver, Toronto and Ottawa.

The deal could hit the market within weeks and would be among the largest offerings of Canadian office properties. Public Works Minister Michael Fortier refused to comment on the status of the plan, but made clear the government's real-estate portfolio is in for a shakeup. The government is expected to use a process known as a "sale-leaseback," by which it sells the buildings to the private sector and then rents them. The government is expected to use 25-year leases, sources said.

Mr. Fortier argued the government doesn't have the $4-billion needed to maintain adequately its portfolio of 6.8 million square metres of office space. Under the planned "partnerships," sources said, the private-sector companies would renovate the buildings at their cost and make money by renting them to the government. The government's 241,000 employees could thus work in better, more energy-efficient buildings.

"The government has not always taken care of its buildings in the same way as a traditional real-estate owner," Mr. Fortier said, pointing out that several buildings are in a "precarious" state. Sphere: Related Content

Toyoko Inns to Enter EUR 100 Million Leaseback of Five Hotels in Europe

The Sunday Business Post - January 28, 2007

Developer Frank Gormley of Howard Euroscape has signed a joint-venture agreement with Japanese hotel operator Toyoko Inns to expand the chain in Europe. The first phase of the contract is worth €100 million and involves the acquisition and development of five sites which will then be leased back to the operator.

The deal will involve Toyoko signing 30 year leases with upward only rent review linked to the retail price index. Gormley expects a 10per cent rental return on the initial project cost and said there is potential to sell on the long-term investment.

Toyoko will focus on opening in Britain and Europe but Gormley said there was a chance the joint venture would also look at opening hotels in the United States. The Toyoko Inn group was established in 1986, and the group head office is located in Kamata. It operates more than 100 hotels, all of them in Japan except for one in China. Sphere: Related Content

Bank of Ireland and AIB to Leaseback More Branches

The Sunday Post - January 28, 2007

Bank of Ireland is set to announce a further sell-off of branches later this year, according to informed investment sources, who also said that AIB was examining a possible sale of more branches. In October, Bank of Ireland agreed sale and leaseback deals on 36 premises for just under €240 million. Half of the 36 branches were bought by Bernard McNamara, Quinlan Private and Friends First.

The selling prices of the branches reflected yields of between 2.6 per cent and 3.7 per cent, less than many investors could have achieved by lodging the money in bank accounts. However, sale and leasebacks on branches are popular because many are in prime locations, rents are increasing and investors are confident that yields will improve after the first round of rent reviews in five years.

AIB sold 12 branches last year for €100 million - well over the guide price of €87million - to developer Gerry Gannon, reflecting a yield of 2.8 per cent. AIB then announced it would sell off another 25 branches in a deal that was expected to raise €100million for the bank.

Sale and leasebacks of branches are becoming increasingly popular internationally, as the banks decide that disposing of property assets will free up capital for other purposes and realise value for shareholders.

Bank of Ireland and AIB have already sold off their headquarters buildings, while in London HSBC is now planning a €1.2 billion sale and leaseback of its headquarters in Canary Wharf in Britain, making it the largest investment deal in British history for a single building.

The bank will sign a 15-year lease on the property as part of the deal. The 45-storey building houses around 8,000 staff and was completed in 2002. Sphere: Related Content

Accor Seeking £500 Million Sale Leaseback of 30 UK Hotels

Estates Gazette reports that French hotel company Accor is seeking a sale leaseback on a portfolio of 30 mid-market Novotel and budget Ibis hotels across the UK.

Accor retained NM Rothschild late last year to arrange the transaction, code-named Project Milky Way. Accor is seeking revenue-based leases so it will not be liable to pay all its rent should it struggle to fill the rooms. British Land is reportedly competing with at least two other bidders to buy a £500m portfolio of hotels.

The sales are part of Accor's strategy to release cash from its portfolio to create a less capital intensive hotel group. During the past 18 months, the firm has sold more than 260 hotels for £1.1bn and plans to sell a further 535 hotels worth £2.2bn by 2008. Accor currently owns more than 1,000 freehold hotels. Sphere: Related Content

Marks and Spencer Plans £500 Million Sale Leaseback of UK Store Portfolio

Forbes - January 23, 2006

Marks & Spencer Group PLC revealed a novel property deal to plug its 704 mln stg pension deficit without requiring a major cash injection.

Instead of contributing cash into the fund M&S has agreed with the pension scheme's trustees to inject 1.1 bln stg of property assets into a partnership with the scheme, with 500 mln stg of value going to the fund -- reducing the deficit by this amount.

M&S will lease back the properties, paying rent of 50 mln stg for 15 years -- a total of 500 mln stg after 15 years when adjusted for the time value of money. The balance of the deficit is expected to be met by future investment returns.

M&S retains control over the properties and retains any capital gains on the properties which revert to it after 15 years. It expects the profit and loss implications of the deal to be minimal. M&S will have the right to substitute properties within the portfolio to suit its corporate needs.

M&S also said it would redeem outstanding secured bonds to the value of 317 mln stg issued by Amethyst Finance PLC, releasing properties with a current market value of 550 mln stg (but with a book value of 343 mln stg as of September 2006) for use in the partnership. The redemption will mean it taking a exceptional hit of 30-35 mln stg in its year to end-March 2007 results. Sphere: Related Content

Nine Welcome Break UK Motorway Service Stations on Market for £365 Million

Financial Times Alphaville - January 26, 2007

Robert Tchenguiz is poised to put a portfolio of Welcome Break motorway service stations on the market to take advantage of rising investor demand in the sector. It is understood that agents DTZ have been hired to sell the nine properties for about £365m. The move comes on the heels of the sale of Moto and RoadChef at prices that suggest a strong appetite for such assets. Mr Tchenguiz and RBS, his partner on the deal, paid £270m for the assets in 2004 through a sale-and-leaseback deal by Investcorp, the Bahrain-based investment group, which still owns Welcome Break’s operating business. Sphere: Related Content