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
Tuesday, September 29, 2009
Monday, September 28, 2009
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
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
Sunday, September 27, 2009
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
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
Saturday, September 26, 2009
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
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
Thursday, September 24, 2009
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
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
Sunday, September 20, 2009
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
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
Thursday, September 17, 2009
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
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
Sunday, September 13, 2009
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
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
Saturday, September 12, 2009
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
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
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
Wednesday, September 09, 2009
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
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
Saturday, September 05, 2009
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
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
Saturday, August 22, 2009
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
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
Tuesday, August 18, 2009
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
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
Sunday, August 09, 2009
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
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
Thursday, July 30, 2009
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
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
Wednesday, July 29, 2009
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
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
Sunday, July 19, 2009
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
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
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
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
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