Columbia Home Trust, Equity Commonwealth and First Potomac Newest To Sell Possessions and Purchase Their Own Business
Columbia Home Trust is selling a 49 % interest in the two-building Market Square workplace complex in Washington, D.C. to an affiliate of the Blackstone Group at a gross value of $595 million.
Columbia Home Trust Inc., Equity Commonwealth and First Potomac Real estate Trust are the current pair of workplace REITs to offer property or put a profile on the marketplace with strategies to utilize a few of the sale proceeds buy back shares that continue to trade at a discount rate to the value of their property holdings.
Share buybacks amongst REITs were a hot topic of discussion throughout the second-quarter incomes season, with numerous business completing repurchases under existing permissions or announcing new programs. Frustrated With Low Evaluations, Workplace REITs Increase Stock Buy-Backs from Accelerating Possession Sales CEO Twenty 8 REITs (35 %) went over share repurchases throughout their second quarter revenues conference calls from the 80 call transcripts, according to Fitch Ratings, which expects REIT share repurchases to remain to enhance through the balance of 2015 and likely into 2016.
The scores company views share repurchases funded from possession sales proceeds as being far more creditor-friendly than debt-funded repurchases. Fitch considers asset sales as successfully equity raises but at personal market appraisals that go beyond public market price. Some business prepare to offer unconsolidated joint endeavor interests, which Fitch said can have the included advantage of reducing intricacy.
Most recently, Atlanta-based Columbia Building Trust revealed that it will certainly be marketing for sale 3 possessions totaling 2.9 million square feet. The buildings being offerd for sale lie in Cleveland, Baltimore and Newark, N.J. The REIT is likewise under agreement to offer a 49 % interest in the two-building Market Square office complex in Washington, D.C. to an affiliate of the Blackstone Group at a gross value of $595 million.
The REIT expects combined gross profits from the deals are anticipated to be roughly $900 million to $1 billion when the sales close, projected for late 2015 or early 2016. Columbia Building Trust will be consuming to $200 million of that to redeem shares of typical stock.
In late 2011, Columbia possessed buildings in 33 markets, with only a single asset in 20 of those markets. It produced 45 % of annualized lease revenue (ALR) from single-tenant structures and over 60 % of ALR from suburban structures.
Today, CXP’s portfolio is focused in 15 markets, with roughly 80 % of ALR from multi-tenant homes and roughly 70 % of ALR from CBD locations.
This month, Columbia stated it will start marketing the 1.3 million-square-foot Secret Center Tower and the 400-room Key Center Marriott in Cleveland, along with the 653,000-square-foot 100 East Pratt in Baltimore and the 961,000-square-foot 80 Park Plaza in Newark.
Columbia stated it is also under contract to offer a 49 % interest in Market Square to Blackstone Building Partners, Blackstone’s Core+ realty financial investment device. The joint venture agreement values the building at $595 million and supplies that Columbia will certainly remain to manage the 686,000-square-foot workplace home situated on a prime Pennsylvania Ave. place in Washington, DC. The transaction is anticipated to close by early 4th quarter of 2015.
Equity Commonwealth Finishes $261 Million in Sales
Also signing up with the trend, Equity Commonwealth completed the sale of 13 buildings totaling 3.4 million square feet for a combined sales price of $260.9 million, in 3 different transactions.
The business also revealed that its board authorized the repurchase of up to an extra $100 countless its impressive common shares under its share repurchase program.
The business offered an 11-property portfolio of small-sized office properties completing 2 million square feet in upstate New York for a gross prices of $104.6 million. It likewise sold the 868,000-square-foot 185 Asylum Street in Hartford, CT, for $113.3 million and finished the sale of a property at 16th and Race in Philadelphia for $43 million. That 609,000-square-foot uninhabited home was designated as held for sale at the end of the second quarter 2015.
Year-to-date, the company has sold $1.7 billion of possessions, consisting of 82 homes and 16.4 million square feet. The business is currently in numerous phases of marketing nine office buildings completing 2.6 million square feet.First Potomac Plans To Sell At Least $200 Countless Assets
First Potomac Realty Trust today upgraded its strategies regarding its ongoing effort to enhance performance and develop extra shareholder value.
“We are taking a variety of specific steps to de-risk our profile, enhance our balance sheet, and reduce our corporate overhead,” stated Douglas J. Donatelli, CEO of First Potomac. “We remain dedicated to enhancing shareholder value through the money making of assets and the redeployment of earnings to repurchase shares, reinforce the balance sheet, and place the company for long-term success.”
First Potomac has actually worked with Holiday Fenoglio Fowler LP to market the following assets in Northern Virginia:
Building Name– Home Type– Square Feet– Location
Newington Sector Park Center– Industrial– 255,600– Lorton, VA
Enterprise Center– Office– 188,933– Chantilly, VA
Gateway Centre Manassas– Company Park– 102,446– Manassas, VA
Herndon Corporate Center– Workplace– 128,359– Herndon, VA
Linden Company Center– Sector Park– 109,809– Manassas, VA
Prosperity Profession Center– Business Park– 71,373– Merrifield, VA
Reston Sector School– Office– 82,378– Reston, VA
Van Buren Workplace Park– Workplace– 106,683– Herndon, VA
Windsor at Field of battle– Office– 155,511– Manassas, VA
In addition, the REIT has Worked with Sage Capital Advisors to market First Potomac’s bulk ownership interest in Storey Park, an advancement website in the NoMa sub-market in Washington, DC, with the ability of accommodating approximately 712,000 square feet of mixed-use development. The REIT set no timeline for offering the site, which is within walking range of Union Station.
The REIT has identified added assets that it prepares to sell and remains in the procedure of selecting sales brokers for the listings. These assets, integrated with the Northern Virginia assets and Storey Park, are prepared for to generate earnings of a minimum of $200 million.
[Editor’s Note: This story was updated Thursday morning at 6 AM to include extra details on First Potomac Real estate Trust’s sales strategies.]