News on M&A of REITs
A number of leading mortgage servicing operations reported quarterly and monthly results today, all of which show that mortgage delinquencies are on the rise – particularly among servicers with subprime inventory.
Aames Investment Corporation reported that delinquencies increased nearly 52 percent to 8.2 percent of loan volume during the second quarter of 2006, up from 5.4 percent at the end of 2005. The total number of loans foreclosed on by the subprime shop, expected to be acquired by Accredited Home Lenders Co. in October, rose during the first half of 2006 by than 157 percent relative to the foreclosure volume reported during the first half of 2005.
Countrywide Financial Corp. said today that pending foreclosures are at their highest level in over two years. The pending foreclosure rate of 0.48 percent for July 2006 is the highest since October 2003, when pending foreclosures stood at 0.50 percent. The portfolio delinquency rate of 4.11 percent is the highest since February, when delinquencies were reported at 4.29 percent.
In its second quarter report, Accredited Home Lenders noted that delinquent loans at the end of the second quarter 2006, including REO inventory, had increased 110 percent from one year ago. The delinquency rate of 3.76 percent at June 30 is a 52 percent increase from the start of 2006, when delinquencies stood at 2.47 percent; delinquencies at Accredited were at just 1.79 percent 12 months ago.
Lastly, soon-to-be acquired Saxon Capital’s second quarter results show that total delinquencies are up 26 percent from 6.36 percent in the first quarter of 2006 to 7.99 percent as of June 30, 2006. New foreclosures are up nearly 10 percent from a year ago, reaching 1.9 percent of the servicing portfolio’s principal balance at the end of the second quarter.
Stay with DS News for operational updates throughout each earnings season.
Real Estate
Morgan to Acquire Glenborough
By TSC Staff
8/21/2006 9:26 AM EDT
URL: http://www.thestreet.com/markets/realestate/10304829.html
Morgan Stanley's (MS) real estate division agreed to acquire Glenborough Realty Trust (GLB) in an all-cash transaction valued at roughly $1.9 billion. Each share of Glenborough will be bought for $26 a share, an 8.2% premium over its closing price Friday. Morgan expects to complete the deal in the fourth quarter. The purchase requires the approval of Glenborough's stockholders, but the company's board has already cleared the arrangement. Shares of Glenborough were rising $3.72, or 15.5%, to $27.75 in premarket trading Monday. "This transaction allows Glenborough to unlock tremendous value for our stockholders and demonstrates the inherent value of Glenborough's assets and our operating platform," the real estate investment trust said. Glenborough is focused on owning multitenant office properties concentrated in Washington, D.C., northern and southern California, Boston and northern New Jersey. The company has a portfolio of 45 properties.
Morgan Stanley Real Estate to Acquire Glenborough Realty Trust in an All Cash Transaction
Glenborough Realty Trust GLB(NYSE:GLB.PrA) (Glenborough) and Morgan Stanley Real Estate announced today that they have entered into a definitive agreement whereby funds managed by Morgan Stanley Real Estate will acquire all of the outstanding common stock of Glenborough in an all-cash transaction valued at approximately $1.9 billion.
Under the terms of the agreement, Morgan Stanley Real Estate will acquire all of Glenborough's outstanding common stock for $26.00 per share in cash through a merger transaction. The per share purchase price represents an 8.2% premium over Glenborough's closing price on August 18, 2006 and a 15.2% premium over the 30-day average closing price through August 18, 2006 for Glenborough's common stock on the NYSE. Holders of limited partnership units in Glenborough's operating partnership will receive $26.00 per unit in cash or, at their election, will have the right either to common units in the surviving operating partnership similar in their terms to the existing common units or, alternatively, to receive a preferred unit in the surviving operating partnership. The total consideration of approximately $1.9 billion includes repayment or assumption of Glenborough's existing debt and redemption of its Series A convertible preferred stock pursuant to its terms. The agreement contemplates that Glenborough will continue to pay regular quarterly distributions at an annualized rate of $1.10 per share and per unit through the closing of the merger with a pro rated distribution for the quarter in which the transaction closes being included in the merger consideration.
Completion of the merger is currently expected to occur during the fourth quarter of 2006 and is subject to approval by Glenborough's common stockholders and certain other customary closing conditions. The transaction has been approved by Glenborough's Board of Directors, which has also recommended that the common stockholders approve the merger.
Andrew Batinovich, Glenborough President and CEO, commented, "This transaction allows Glenborough to unlock tremendous value for our stockholders and demonstrates the inherent value of Glenborough's assets and our operating platform."
"We are excited about this unique opportunity to acquire a well-diversified office portfolio," said Michael Franco, Managing Director of Morgan Stanley Real Estate. "Glenborough's high-quality office properties are located in some of the country's most desirable and supply-constrained office markets, such as Washington, D.C., and Northern and Southern California. In Glenborough, we believe we have acquired some terrific assets and a talented team of professionals."
Goldman, Sachs & Co. acted as a financial advisor to Glenborough's Board of Directors and Morrison & Foerster LLP and Venable LLP served as legal counsel. Morgan Stanley acted as financial advisor to Morgan Stanley Real Estate and Goodwin Procter LLP and Paul, Hastings, Janofsky & Walker LLP served as legal counsel.
Glenborough is a REIT which is focused on owning high quality, multi-tenant office properties concentrated in Washington, D.C., Southern California, Boston, Northern New Jersey, and Northern California. The Company has a portfolio of 45 properties encompassing approximately 8 million square feet as of June 30, 2006.
Morgan Stanley Real Estate is comprised of three major global businesses: Investing, Banking and Lending. Since 1991, Morgan Stanley Real Estate has acquired $87.7 billion of real estate assets worldwide and currently manages $50.9 billion in real estate on behalf of its clients. In addition, Morgan Stanley Real Estate provides a complete range of market-leading investment banking services to its clients including advice on strategy, mergers, acquisitions and restructurings, as well as underwriting public and private debt and equity financings. Morgan Stanley is also a global leader in real estate lending and, using its own capital, originated approximately $28 billion in commercial mortgages in 2005. For more information about Morgan Stanley Real Estate, go to www.morganstanley.com/realestate.
Morgan Stanley MS is a global financial services firm and a market leader in securities, investment management, and credit services. With more than 600 offices in 30 countries, Morgan Stanley connects people, ideas and capital to help clients achieve their financial aspirations.
Morgan Stanley Unit to Buy Glenborough
SAN MATEO, Calif. (AP) - Glenborough Realty Trust said Monday it agreed to be acquired by the real estate division of investment bank Morgan Stanley for $1.9 billion in cash plus the assumption of debt.
Morgan Stanley Real Estate agreed to pay $26 per share for the California-based realty group. The price represents a 8.2 percent premium over Glenborough's closing price of $24.03 on Friday.
A Morgan Stanley spokeswoman said the company would not disclose the amount of debt included in the deal. A Glenborough contact was not immediately available to comment.
Glenborough, which owns office properties in Boston, Washington, northern New Jersey and Northern and Southern California, said its shareholders can also opt instead of cash to take a preferred unit in the surviving operating partnership.
The agreement stipulates Glenborough will continue to pay a $1.10 annualized dividend until the transaction closes, which is expected in the fourth quarter.
Glenborough shares added $1.95, or 8.1 percent, to $25.98 in early trading.
© 2006 The Associated Press.Morgan Stanley buys out Glenborough REIT for $1.9B
Glenborough Realty Trust Inc. said on Monday that it has agreed to be acquired by funds managed by Morgan Stanley Real Estate for about $1.9 billion.
The buyout values San Mateo-based Glenborough's (NYSE:GLB)shares at $26, an 8.2 percent premium over Friday's closing price.
The deal is expected to close in the fourth quarter.
Glenborough has 45 properties with about 8 million square feet in Washington, D.C., Southern California, Boston, Northern New Jersey and Northern California.
Morgan Stanley Real Estate manages $50.9 billion in real estate.
Owner of Washington-area properties acquired
Morgan Stanley Real Estate acquired the assets of Glenborough Realty Trust for $1.9 billion.
Under the terms of the agreement, Morgan Stanley will pay $26 per share in cash, an 8.2 percent premium on Glenborough's stock price.
The deal, which already has approval of Glenborough's board, is expected to be completed in the fourth quarter.
Glenborough (NYSE: GB) is a San Mateo, Calif.-based real estate investment trust and owns 8 million square feet of office properties, including 1.3 million square feet in the Washington area. Its local properties include 1525 Wilson Blvd., Arlington; Metro Place II, Merrifield; Capitol Place III, D.C.; and 1100 17th St. NW, D.C.
"Glenborough's high-quality office properties are located in some of the country's most desirable and supply-constrained office markets, such as Washington, D.C., and Northern and Southern California," says Michael Franco, Managing Director of Morgan Stanley Real Estate.
Morgan Stanley Real Estate (NYSE:MS) currently manages $50.9 billion in real estate on behalf of its clients. Last year, the real estate division acquired several Washington-area office properties from The JBG Cos. for $644 million.
Calif. REIT with regional properties acquired
Morgan Stanley Real Estate acquired the assets of Glenborough Realty Trust for $1.9 billion.
Its the second billion-dollar acquisition Morgan Stanley's had a hand in locally in the last year. Baltimore apartment operator Town and Country Trust struck a deal in December to be acquired by a joint venture led by Morgan Stanley for $1.3 billion. A bidding war among rival suitors soon broke out.
Under the terms of the agreement to buy Glenborough, Morgan Stanley will pay $26 per share in cash, an 8.2 percent premium on Glenborough's stock price.
The deal, which has been approved by Glenborough's board, is expected to be completed in the fourth quarter.
Glenborough (NYSE: GB) is a San Mateo, Calif.-based real estate investment trust and owns 8 million square feet of office properties, including 1.3 million square feet in the Washington area. Its local properties include 1525 Wilson Blvd., Arlington; Metro Place II, Merrifield; Capitol Place III, D.C.; and 1100 17th St. NW, D.C.
"Glenborough's high-quality office properties are located in some of the country's most desirable and supply-constrained office markets, such as Washington, D.C., and Northern and Southern California," said Michael Franco, managing director of Morgan Stanley Real Estate.
Morgan Stanley Real Estate (NYSE: MS) currently manages $50.9 billion in real estate on behalf of its clients. Last year, the real estate division acquired several Washington-area office properties from The JBG Cos. for $644 million.
Morgan Stanley to Buy Glenborough Realty
SAN FRANCISCO (AP) - Glenborough Realty Trust Inc. Monday said it has agreed to be acquired by funds managed by Morgan Stanley & Co. for roughly $1.9 billion including the assumption of debt.
The buyout values San Mateo-based Glenborough common shares at $26 each, an 8.2 percent premium over their close on Friday at $24.03.
Glenborough shares rose $1.94, or 8.1 percent, to close Monday at $25.97 on the New York Stock Exchange.
Based on the number of shares outstanding at the end of June, the acquisition is worth roughly $860 million excluding debt.
Glenborough is a real-estate investment trust that owns 45 properties, mainly office buildings in Washington, Boston, California and New Jersey.
The company said holders of its limited partnership units can opt to receive either $26 in cash, or common units in the surviving operating partnership similar to the terms of the existing common units, or a preferred unit in the surviving operating partnership.
The bid includes repayment or assumption of Glenborough's existing debt and redemption of its Series A stock.
The deal is expected to close in the fourth quarter.
© 2006 The Associated Press.Morgan Stanley fund to buy Glenborough Realty
NEW YORK (Reuters) - Glenborough Realty Trust , a real estate investment trust that owns office properties chiefly in suburban areas, agreed to be acquired by funds managed by Morgan Stanley Real Estate, the companies said on Monday.
Morgan Stanley's offer of $26 a share represents an 8.2 percent premium over Glenborough's Friday closing price and a 15.2 premium over the 30-day average closing price, the companies said.
The equity portion of the deal is valued at about $915 million, according to Robert W. Baird & Co. analyst David Loeb.
The deal give shareholders $26 in cash for their 32.2 million shares and holders of about 3 million operating partnership units the choice of either cash or a stake in the new entity.
The deal is expected to be completed in the fourth quarter. Morgan Stanley Real Estate, a unit of Morgan Stanley's institutional securities division, valued the deal at $1.9 billion including debt.
The companies declined to disclose the price excluding debt. Glenborough did not return phone calls.
The deal for San Francisco-based Glenborough would be the latest of a string of REIT acquisitions and highlights private-investor interest in the publicly traded real estate companies.
"The fact that they have been streamlining the portfolio well for the last couple of years and the diversity of the regions of their portfolio made it a likely candidate for sale," said RBC Capital senior analyst Sri Nagarajan.
Glenborough shares closed at $25.97, up $1.94 or 8 percent on the New York Stock Exchange on Monday.
Glenborough's properties are chiefly located in the suburbs of Washington, D.C., Southern California, Northern New Jersey and Boston, where the demand for office space has either rebounded strongly over the past year or is in earlier stages of recovery. About 21 percent of its holdings of 8 million square feet are located in city downtown areas.
"It's a mix of urban and suburban in 24-hour markets -- where's there's office and also residential and retail," Loeb said. "The common element here is that they're costal markets, close to transportation and executive housing."
The deal for Glenborough follows SL Green Realty Corp.'s $4 billion bid for smaller New York office property owner Reckson Associates Realty Corp. .
Since the beginning of last year, 144 REITs, mostly in the United States, have been acquired or have agreed to be acquired, according to data tracker Dealogic. Of those, 17 have agreed to be bought by private funds or companies for a value of $26 billion.
Because they are publicly traded companies, REITs are constrained in their use of debt -- credit lines, bonds, loans, and mortgages -- to the tune of about 50 percent of their balance sheet value.
However, some private companies have financed their acquisitions for REITs with more than 90 percent debt, betting that the strengthening of commercial real estate occupancy and rental rates will more than outweigh borrowing costs. With the use of debt, private buyers have been valuing some companies higher than public ones.
"We thought (Glenborough) was undervalued and put $26 target on it," said Loeb, who only recently issued coverage and a value on the shares. "It's no surprise a private market would come out and buy it."
Pension funds in particular are eyeing REITs as the quickest way for putting money to work rather than buying individual properties, he added.
Morgan Stanley is one of the world's biggest real estate investors, managing $51 billion in real estate on behalf of its clients besides a portfolio of $88 billion of property.
Recent Morgan acquisitions in the U.S. include its March purchase, with partners, of multifamily properties REIT Town & Country Trust for $1.5 billion. In February, Morgan Stanley Real Estate's Prime Property Fund closed on its acquisition of AMLI Residential Properties Trust for $2.1 billion.
(Additional reporting by Joe Giannone)
Copyright 2006 ReutersMorgan Stanley to buy mortgage firm Saxon Capital
NEW YORK (Reuters) - Morgan Stanley on Wednesday said it agreed to acquire residential mortgage lender and servicer Saxon Capital Inc. for $706 million as the largest U.S. investment bank looks to catch up with rivals that have bigger, integrated mortgage businesses.
New York-based Morgan Stanley said it will pay $14.10 a share in cash for Saxon stock. That's a 29 premium to Saxon's $10.97 closing price on the New York Stock Exchange Tuesday.
Morgan Stanley said Saxon, based in Glen Allen, Virginia, will expand its ability to service mortgage accounts, improve risk management and generate loans to individuals with less-than-prime credit scores. Pending regulatory and shareholder approvals, the deal is expected to be completed by the end of this year.
Saxon was the 14th-largest non-prime mortgage servicer last year, handling accounts representing $26 billion in loans. The company, which also buys and originates loans, held $6.5 billion in mortgages in its portfolio as of March 31.
Separately, Saxon on Wednesday said second-quarter profit rose 23 percent to $8.6 million, or 17 cents a share. Servicing income in the period rose 19 percent to $20.4 million.
Residential home loans underpin the largest segment of global debt markets and in recent years have helped fuel record profit for leaders such as Lehman Brothers Holdings , Goldman Sachs Group and Bear Stearns Cos.
Lehman and Bear, in particular, snapped up small mortgage businesses that generate loans that could be packaged into bonds, then issued and traded. This top-to-bottom integration offers dealers wider profit margins and better insight into mortgage markets.
Copyright 2006 ReutersMorgan Stanley to Buy Saxon Capital
NEW YORK (AP) - Morgan Stanley Inc. on Wednesday took a big step in its goal to build a stronger residential mortgage business, announcing it will acquire Saxon Capital Inc. in a $706 million deal.
The investment bank hopes to use Glen Allen, Va.-based Saxon's residential mortgage origination business to support its own mortgage-backed securities operations. Morgan Stanley is paying a 29 percent premium for Saxon by offering $14.10 per share in cash in a transaction expected to close at the end of the year.
Morgan Stanley Chief Executive John Mack has said repeatedly he will aggressively pursue acquisitions to prop up the company's mortgage-originations and servicing operations.
"The acquisition of Saxon is another important step in our long-term strategy of broadening the Firm's global franchise in the critical residential mortgage business, which represents the single largest segment of the global debt market," said Anthony Tufariello, Morgan Stanley's head of its securitized products group. "This deal also provides Morgan Stanley with new origination capabilities in the non-prime market, which we can build upon to provide access to high-quality product flow across all market cycles."
The news sent Saxon's shares soaring 27 percent, or $2.96, to $13.93 on the New York Stock Exchange. Over the past year, shares have traded between $8.84 and $14.30. Morgan Stanley shares fell 44 cents to $65.73 on the NYSE.
Saxon Chairman Richard A. Kraemer said the deal serves the "best long-term interests of our shareholders, clients and employees." He believes the company will be able to build on Morgan Stanley's existing business.
Saxon was advised by Credit Suisse Securities, who rendered a fairness opinion to Saxon's board. The company's legal advisers included Gibson, Dunn & Crutcher LLP and Ballard Spahr Andrews & Ingersoll LLP.
Hersha Hospitality Trust Purchases Brand New Residence Inn; Adds Twentieth Hotel in the High Barrier-to-Entry New England Market
PHILADELPHIA--(BUSINESS WIRE)--July 27, 2006--Hersha Hospitality Trust (AMEX: HT), a real estate investment trust (REIT) and owner of 60 nationally franchised, upper-upscale, upscale and midscale limited service and extended-stay hotels, today announced that it has closed on the purchase of the 96-suite Residence Inn in Norwood, Massachusetts, for $14.25 million. The Company will use a combination of cash and issue 425,486 operating partnership units to the seller to complete the transaction.Jay H. Shah, Chief Executive Officer commented, "We are pleased to acquire this newly built property, which is our tenth in the vibrant Boston marketplace. This Residence Inn was sourced to us through an off market negotiation with one of our key development partners in New England. This is our second transaction in 2006 where the developer has provided a vote of confidence in our strategy by electing to accept consideration in the form of Hersha Hospitality operating partnership units. We expect this transaction to provide an unlevered yield of 8 percent at the outset, but rise to 11 percent after stabilization. This property complements our existing portfolio of twelve upscale extended stay hotels."
The Residence Inn Norwood, Massachusetts, which opened today, July 27, 2006, is located on 275 Norwood Park South and is convenient to the corporate offices of Bayer Diagnostics, New York Life, Pepsi, the famous Auto Mile, and Gillette Stadium, home of the New England Patriots Football and New England Revolution Soccer Teams.
About Hersha Hospitality
Hersha Hospitality Trust is a self-advised real estate investment trust that owns interest in 60 midscale, upscale and upper upscale hotel properties with 7,443 rooms located in high barrier to entry markets primarily from Metro Boston, Massachusetts to Metro Washington, D.C., with strong, national franchise affiliations. The Company focuses on acquisition and joint venture opportunities in primary and secondary markets near major metropolitan areas. More information on the Company is available on the Company's web site at www.hersha.com.
LaSalle Hotel Properties Acquires the Hotel Solamar in San Diego, California
BETHESDA, Md.--(BUSINESS WIRE)--Aug. 1, 2006--LaSalle Hotel Properties (NYSE:LHO) today announced it has acquired the Hotel Solamar in San Diego, California, for $87.0 million. The 235-room, newly built, independent full-service hotel is located in the heart of downtown San Diego's Gaslamp Quarter Historic District. The hotel sits on the corner of Sixth Avenue and J Street, two blocks from Petco Park and three blocks from the San Diego Convention Center. The hotel is also surrounded by the city's trendiest shopping, theaters, art galleries and over 75 restaurants and night clubs. Hotel Solamar is operated by Kimpton Hotel & Restaurant Group, LLC.The hotel's unique sun and sea design creates an experience that attracts demand from all market segments. The hotel includes a full-service restaurant featuring Coastal California cuisine for breakfast, lunch and dinner and a popular rooftop oasis serving cocktails and light cuisine with 225 seats, a large pool, cabanas and views overlooking downtown San Diego. The Hotel Solamar opened in April 2005 and contains a fitness center, business center, in-room spa services, parking facility, 8,800 square feet of meeting space and an additional 2,000 square feet of unfinished street-front space available for retail or additional meeting space. The hotel is subject to a long-term ground lease.
"We are excited to further our presence in the emergent Gaslamp Quarter with the acquisition of this newly built high-style hotel," remarked Jon Bortz, Chairman and Chief Executive Officer of LaSalle Hotel Properties. "San Diego is one of the most attractive leisure and convention destinations and one of the highest occupancy markets in the United States. The Hotel Solamar is in an irreplaceable location in the heart of the fastest growing area of downtown San Diego, and it's just two blocks from our stylish Hilton Gaslamp Quarter Hotel."
Hotel Solamar will continue to be managed by Kimpton Hotel & Restaurant Group, LLC, which manages seven other hotels for LaSalle Hotel Properties located in Washington, D.C., Boston, MA and Seattle, WA. Kimpton operates upscale and luxury boutique/lifestyle hotels in the U.S. and Canada, and has had a strong relationship with the Company since 2001.
"We are delighted to expand our long-standing relationship with Kimpton and are eager to work with them to bring this fabulous new hotel to its full potential," continued Mr. Bortz.
"It is clear that Kimpton and LaSalle have a winning combination with a profitable track record, and we are excited to extend our partnership into the state of California," said Kimpton CEO and President Mike Depatie. "Being chosen by LaSalle Properties to manage an eighth hotel is yet another vote of confidence for Kimpton - for our expertise, the heartfelt care we provide our guests at every touch point, and for our unique culture that gives Kimpton-managed hotels a distinct competitive advantage."
LaSalle Hotel Properties is a leading multi-tenant, multi-operator real estate investment trust, owning interests in 30 upscale and luxury full-service hotels, totaling approximately 8,700 guest rooms in 15 markets in 11 states and the District of Columbia. The Company focuses on owning upscale and luxury full-service hotels located in urban, resort and convention markets. LaSalle Hotel Properties seeks to grow through strategic relationships with premier internationally recognized hotel operating companies, including Westin Hotels and Resorts, Sheraton Hotels & Resorts Worldwide, Inc., Crestline Hotels and Resorts, Inc., Outrigger Lodging Services, Noble House Hotels & Resorts, Hyatt Hotels Corporation, Benchmark Hospitality, White Lodging Services Corporation, Gemstone Resorts International, LLC, Thompson Hotels, Sandcastle Resorts & Hotels, Davidson Hotel Company, and the Kimpton Hotel & Restaurant Group, LLC.
| JULY 28, 2006 - 09:52 ET |
| Chartwell REIT Announces New Acquisitions, Mezzanine Financings And Internal Growth Projects |
| MISSISSAUGA, ONTARIO--(CCNMatthews - July 28, 2006) - Chartwell Seniors Housing Real Estate Investment Trust (TSX:CSH.UN) announced today that it had approved investments with a total cost of approximately $84.1 million in various new acquisitions, mezzanine financings and internal growth projects. Chartwell will acquire Elizabeth Towers, a 104 suite assisted-living retirement home and seniors apartment complex located in St. John's, Newfoundland. The property includes approximately 1.5 hectares of land and 33,700 square feet of commercial space, currently 100% leased under long-term agreements with such tenants as a medical clinic, pharmacy, fitness centre and other appropriate services. The purchase price will be approximately $24.7 million plus closing costs. A new seven-year mortgage of $16.1 million with an interest rate of 4.72% will be put in place on closing, anticipated in early August 2006. This acquisition, combined with the nearby 116-suite King William Village, a Chartwell Classic residence currently under development by Spectrum Seniors Housing Development LP ("Spectrum") and the Crosbie Group, will form a solid operating platform on which the REIT will expand in the vibrant Atlantic Canada market. Chartwell, through its joint venture with ING Real Estate Australia ("ING"), will also acquire Lake Worth Gardens, a 170 suite seniors independent living community located in Lake Worth, Florida. Lake Worth, situated in Palm Beach County, is one of the fastest growing metropolitan areas in the United States, and is recognized as one of the nation's best locations for new business ventures. Chartwell's joint venture US property management company, Horizon Bay Management, has been managing the property since January 2005. Chartwell and ING will each acquire a 50% interest in this high quality facility. The total purchase price will be approximately Cdn $22.0 million plus closing costs and a 10 year mortgage of approximately Cdn $15.4 million with an interest rate of 6.68% will be placed on the project on closing. Closing is expected in early August 2006. In addition, Chartwell will extend a mezzanine loan of $4.5 million to its joint venture partners, Spectrum and Melior Development Ltd., for the construction and lease-up of 175 new independent living suites in Gatineau, Quebec. This $22.6 million project, Cite Jardin Phase IV, will be built on land adjacent to the existing Cite Jardin towers (Phase I and II) acquired by the REIT in July 2004. Chartwell will receive interest on its mezzanine loan of 10% per annum, as well as an upfront placement fee of $780,000. The new development project is expected to be completed and fully stabilized in September 2009. The current Cite Jardin Phase III development project consisting of 173 new suites opened this summer with over 90% of the suites spoken for and is expected to be offered to Chartwell for purchase in the fall of 2006. A new internal growth project was also approved. The REIT will make an equity investment of approximately $3.9 million in the expansion of Residence Ste-Marthe in Saint-Hyacinthe, Quebec. Originally a religious convent, the project will add 131 new suites to the existing 67 suite facility. The completion of the project is estimated in late 2007 for a total cost of approximately $14.8 million. "The pace of our acquisition, development and internal expansion activities continues to accelerate, and we anticipate that we will easily exceed our acquisition targets by the end of the year," commented Stephen Suske, Vice Chair and President. Chartwell REIT is a growth-oriented investment trust owning and managing a complete spectrum of seniors housing properties. It is currently the second largest participant in the Canadian seniors housing business with a growing presence in the United States. Chartwell will capitalize on the strong demographic trends present in its markets to grow internally and through accretive acquisitions. Chartwell REIT also has an exclusive option to purchase stabilized facilities from Spectrum Seniors Housing Development LP, Canada's largest and fastest growing seniors housing development company. Chartwell's Distribution Reinvestment Plan (DRIP) allows Unitholders to have their monthly cash distributions used to purchase units without incurring commission or brokerage fees, and receive bonus units equal to 3% of their monthly cash distributions. More information can be obtained at www.chartwellreit.ca |
Innkeepers USA Signs Agreement to Acquire Four-Hotel Package in Southern California
PALM BEACH, Fla., July 27 /PRNewswire-FirstCall/ -- Innkeepers USA Trust (NYSE: KPA) , a hotel real estate investment trust (REIT), today announced that it has entered into an agreement to acquire from Bethesda, Md.-based RLJ Urban Lodging Fund, L.P., an affiliate of RLJ Development, LLC, four hotel properties with 931 rooms in Southern California for a total cost of $215 million, or $231,000 per room.
The company expects to fund the acquisition with borrowings under its unsecured line of credit and the issuance of approximately $165.0 million in non-recourse debt at a weighted average interest rate of approximately 6.25 percent, including the assumption of $13.7 million of debt. After the acquisition, the company estimates that its debt to total investment in hotels at cost will be approximately 40 percent, without regard to any future borrowings or equity offerings.
Innkeepers Hospitality Management, which is owned by Jeffrey H. Fisher, chief executive officer of Innkeepers USA Trust, will manage the hotels under long-term management agreements. The acquisition, which is expected to close in the 2006 third quarter, is subject to a number of customary contractual closing conditions.
The four hotels are being acquired at a net operating income (NOI) capitalization rate of approximately 7 percent on projected 2007 net operating income and a multiple of approximately 12.5 times projected 2007 earnings before interest, taxes, depreciation and amortization (EBITDA).
"This transaction combines one of the most dynamic regional lodging markets in the U.S. with strongly performing hotels, affiliated with two of the best-performing and most desirable brands among hotel investors -- Residence Inn by Marriott and Hilton," Fisher said. "The addition of these properties to our portfolio further diversifies our distribution throughout the state; marks our initial entry into San Diego, one of the very best and highest-barriers-to-entry hotel markets in the country; establishes a significant footprint in the desirable Anaheim market; and bolsters our existing presence in the fast growing Ontario market.
"With this acquisition, we are also furthering our strategy of opportunistically acquiring full-service hotels. Perhaps more important, this transaction gives us the opportunity to acquire a unique mix of high-quality, profitable, full-service and extended-stay hotels on a portfolio basis at an attractive price, with upside potential.
"Southern California remains one of the nation's most sought-after locations for real estate investment," he added. "Business and leisure travel to the region remains robust, with Smith Travel reporting revenue per available room (RevPAR) growth for all hotels in Southern California of 11- plus percent in 2005 and 9.3 percent in 2006 through June. Each of these properties is in an outstanding location in its respective market, which we believe will provide us an advantage over current and future competition."
The two Residence Inns are upscale, interior-corridor, all-suite buildings that opened in 2003. "No expense was spared in creating high-quality, upscale extended-stay properties that are among the best in the entire Residence Inn chain. The Hilton and Hilton Suites also are in excellent physical condition, with the sellers indicating that they have made $12.5 million in capital improvements in the last five years, equivalent to $23,100 per room. The renovation of the Hilton Ontario should be completed later this year. We have budgeted approximately $2.0 million for additional upgrades that may be required by franchisors as a result of the transfer. All four properties are well-positioned to take advantage of the expected aggressive average rate growth in their respective markets."
Fisher noted that the company will continue to seek acquisition and development opportunities that achieve high shareholder returns, with the primary focus remaining premium-branded upscale extended-stay and select- service hotels, the core of the company's portfolio; selected full-service hotels; and turn-around opportunities for hotels that operate under or can be converted to the industry's leading brands.
Innkeepers USA Trust owns or is invested in 70 hotels with a total of 8,818 suites or rooms in 20 states and Washington, D.C. For more information about Innkeepers USA Trust, visit the company's web site at http://www.innkeepersusa.com/.
First Potomac Realty Trust Acquires Value-Add Property in Montgomery County, Maryland for $39.5 Million; Gateway 270 West Provides Value-Add Opportunity in Maryland's I-270 Corridor
BETHESDA, Md.--(BUSINESS WIRE)--July 27, 2006--First Potomac Realty Trust (NYSE:FPO) today announced that it has acquired Gateway 270 West, a six-building flex/office property totaling 254,625 square feet, in Clarksburg, Maryland, from Forsgate Industrial Partners for $39.5 million in cash.Gateway 270 West is located on 35 acres in the rapidly growing I-270 Corridor submarket of Montgomery County and is currently 55% leased to 10 tenants. With this acquisition, First Potomac owns approximately 1.5 million square feet in the I-270 Corridor.
Commenting on the transaction, Nicholas R. Smith, First Potomac's chief investment officer, stated, "We have been closely monitoring the increasing rental rates in the I-270 Corridor. The market has improved dramatically and has tightened in recent months. We know the tenants in this market very well and expect that controlling a large share of the available space will enable us to lease the vacant space quickly at attractive rents. Our hands-on management and leasing philosophy should add significant value to this well-located property in one of the strongest markets in Maryland."
About First Potomac Realty Trust
First Potomac Realty Trust is a real estate investment trust (REIT) that focuses on owning and operating industrial and flex properties in the Washington, D.C. metropolitan area and other major markets in Virginia and Maryland. The Company's portfolio totals approximately 9.8 million square feet, and its largest tenant is the U.S. Government.
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SAN FRANCISCO, July 27 /PRNewswire-FirstCall/ -- Digital Realty Trust, Inc. , a leading owner and manager of corporate data centers and Internet gateways, today announced the acquisition of the Internet gateway for the Phoenix metropolitan area and data center facilities in Ft. Worth, Texas and Amsterdam, The Netherlands. The total purchase price paid for these three acquisitions was approximately $236.9 million. The Company has also announced the sale of Stanford Place II, located in the Denver Tech Center, realizing a gain of $17.9 million. Acquisitions The largest acquisition is a 347,000 square foot Internet gateway located at 120 East Van Buren in Phoenix, Arizona. It serves as the primary hub for Internet traffic in the greater Phoenix area and is the premier facility for corporate data center applications in the high-demand Phoenix market. The building contains 175,000 square feet of data center space including over 95,000 square feet of space operated by the building for corporate users as well as an 11,000 square foot meet-me-room (MMR) that facilitates access to the numerous carriers serving the property. Digital Realty Trust plans to add 30,000 square feet of new raised floor to accommodate the increasing demand for highly improved, custom data center space in the Phoenix market. The purchase price was $175.0 million. The second acquisition consists of twin 28,000 square foot data center buildings located in Amsterdam, The Netherlands. The buildings were constructed in 2000 as data centers specifically for a major European IT services company, which occupies 100% of the property through 2015. Combined, the buildings contain approximately 33,000 square feet of raised floor with the balance used for technical support and office space. The purchase price for the property was euro 8.875 million, or approximately $11.3 million based on current exchange rates. The third acquisition is the sale-leaseback of a highly improved data center facility located in Ft. Worth, Texas. The property was built in 2000 and totals 263,700 square feet, consisting of a single-story 109,500 square foot fully improved data center, a two-story 39,000 square foot annex containing office and conference facilities, and an 115,500 square foot warehouse. The facility is 100% leased to Savvis Corporation for a 15-year term. The tenant has the option to convert much of the warehouse space to a fully improved data center to accommodate its growth. The purchase price for the property was $50.6 million. According to Digital Realty Trust CEO Michael Foust, "The acquisition of Phoenix's premier Internet gateway facility represents a very significant addition to our portfolio. It enhances our presence in this important top tier market and expands our ability to provide exceptional data center and collocation services to our corporate and network customers. There are over 40 different fiber carriers operating in the facility; and with the substantial power available at the property, the building accommodates mission critical applications for a wide variety of corporate users. Additionally, the acquisition of the highly improved data centers in Ft. Worth and Amsterdam further expands our footprints in these key markets while adding to our portfolio of stabilized, income producing properties." | ||||||
27 July 2006
Innkeepers USA Signs Agreement to Acquire Four-Hotel Package in Southern California
PALM BEACH, Fla., Innkeepers USA Trust (NYSE:KPA) , a hotel real estate investment trust (REIT), today announced that it has entered into an agreement to acquire from Bethesda, Md.-based RLJ Urban Lodging Fund, L.P., an affiliate of RLJ Development, LLC, four hotel properties with 931 rooms in Southern California for a total cost of $215 million, or $231,000 per room.
The company expects to fund the acquisition with borrowings under its unsecured line of credit and the issuance of approximately $165.0 million in non-recourse debt at a weighted average interest rate of approximately 6.25 percent, including the assumption of $13.7 million of debt. After the acquisition, the company estimates that its debt to total investment in hotels at cost will be approximately 40 percent, without regard to any future borrowings or equity offerings.
Innkeepers Hospitality Management, which is owned by Jeffrey H. Fisher, chief executive officer of Innkeepers USA Trust, will manage the hotels under long-term management agreements. The acquisition, which is expected to close in the 2006 third quarter, is subject to a number of customary contractual closing conditions.
The four hotels are being acquired at a net operating income (NOI) capitalization rate of approximately 7 percent on projected 2007 net operating income and a multiple of approximately 12.5 times projected 2007 earnings before interest, taxes, depreciation and amortization (EBITDA).
"This transaction combines one of the most dynamic regional lodging markets in the U.S. with strongly performing hotels, affiliated with two of the best-performing and most desirable brands among hotel investors -- Residence Inn by Marriott and Hilton," Fisher said. "The addition of these properties to our portfolio further diversifies our distribution throughout the state; marks our initial entry into San Diego, one of the very best and highest-barriers-to-entry hotel markets in the country; establishes a significant footprint in the desirable Anaheim market; and bolsters our existing presence in the fast growing Ontario market.
"With this acquisition, we are also furthering our strategy of opportunistically acquiring full-service hotels. Perhaps more important, this transaction gives us the opportunity to acquire a unique mix of high-quality, profitable, full-service and extended-stay hotels on a portfolio basis at an attractive price, with upside potential.
"Southern California remains one of the nation's most sought-after locations for real estate investment," he added. "Business and leisure travel to the region remains robust, with Smith Travel reporting revenue per available room (RevPAR) growth for all hotels in Southern California of 11- plus percent in 2005 and 9.3 percent in 2006 through June. Each of these properties is in an outstanding location in its respective market, which we believe will provide us an advantage over current and future competition."
The two Residence Inns are upscale, interior-corridor, all-suite buildings that opened in 2003. "No expense was spared in creating high-quality, upscale extended-stay properties that are among the best in the entire Residence Inn chain. The Hilton and Hilton Suites also are in excellent physical condition, with the sellers indicating that they have made $12.5 million in capital improvements in the last five years, equivalent to $23,100 per room. The renovation of the Hilton Ontario should be completed later this year. We have budgeted approximately $2.0 million for additional upgrades that may be required by franchisors as a result of the transfer. All four properties are well-positioned to take advantage of the expected aggressive average rate growth in their respective markets."
Fisher noted that the company will continue to seek acquisition and development opportunities that achieve high shareholder returns, with the primary focus remaining premium-branded upscale extended-stay and select- service hotels, the core of the company's portfolio; selected full-service hotels; and turn-around opportunities for hotels that operate under or can be converted to the industry's leading brands.
July 24, 2006 10:48 AM US Eastern Timezone
Colonial Properties Trust Acquires Four Multifamily Communities in Key Markets
BIRMINGHAM, Ala.--(BUSINESS WIRE)--July 24, 2006--Colonial Properties Trust (NYSE:CLP), a real estate investment trust that owns a portfolio of multifamily, office and retail properties, today announced the purchase of four multifamily communities located in key markets in Texas, Georgia and North Carolina for a total of $141.8 million. Colonial Village at Shoal Creek, purchased for $33.9 million and Colonial Village at Willow Creek, purchased for $39.3 million are both located in Bedford, Texas (a well established submarket of Dallas/Ft.Worth). Colonial Grand at McDaniel Farm, in Atlanta, Georgia, was purchased for $41 million and Colonial Village at Chancellor Park in Charlotte, N.C. was purchased for $27.8 million. The investments, which were funded through the company's unsecured line of credit and subsequent disposition proceeds, add 1,650 Class A apartment units with an average age of 9 years.
"These properties are a great addition to Colonial Properties Trust and enhance the quality of our overall portfolio in the Dallas/Fort Worth, Atlanta and Charlotte markets" said Paul Earle, executive vice president of the company's multifamily division. "Additionally, this furthers the company's strategy of increasing our emphasis in multifamily," he added.
Colonial Village at Shoal Creek (formerly Shoal Creek) with 408 units was acquired on June 1st. Colonial Village at Willow Creek (formerly Meridian Hill) with 478 units and Colonial Grand at McDaniel Farm (formerly Summer Ridge) with 424 units were acquired on May 31st. Colonial Village at Chancellor Park (formerly Chancellor Park) with 340 units was acquired on June 30th. Occupancy rates for the four properties are as follows: Colonial Village at Shoal Creek, 95.6%; Colonial Village at Willow Creek, 94.8%; Colonial Grand at McDaniel Farm, 95% and Colonial Village at Chancellor Park, 91%.
- Accredited Home Lenders Holding Co. to Acquire Aames Investment Corporation
- 2006 May 25 | 12:15 PM
- Aames Investment Corporation announced that Accredited Home Lenders Holding Co. has signed a definitive agreement pursuant to which Accredited will acquire Aames. The stock-and-cash transaction values Aames at approximately $340 million, or $5.35 per share at closing prices. Of the $340 million purchase price, approximately $109 million, or 32% of the purchase price, will be paid in cash to Aames stockholders. The remainder will be paid in Accredited's common stock at an exchange ratio of 0.0700 shares of Accredited's common stock for each share of Aames common stock.
posted by B at 10:33 PM
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