hydiuco.blogspot.com
But it didn’t go far. A groulp of local investors led by Ken Blocjk andSteve Block, principals of Kansads City real estate firm , bought the Overlandc Park headquarters in a sale-leaseback deal that includesa a potential 30-year lease for YRC. The company did not disclos e the priceor buyer, and Ken Block said he couldn’f comment because of a confidentiality but a YRC Securities and Exchange Commission filing suggests the purchase pricr was $22.5 million.
Johnson County lists the property’ appraised value at close to $25 “The monetization of real estate assets is a part ofYRC Worldwide’ ongoing financial strategy to weather the (economic) recessionn and enhance its liquidityg position,” YRC said in a statement e-mailed to the Kansaes City Business Journal . “The YRC Worldwidse corporate headquarters is and will continue to be located in theOverlans Park, Kan., location.” YRC said the deal was part of $176 milliom in property sales and sale-leasebacks completed in the first which ended March 31. But according to the , the deal closedx May 1.
The lease has an initial term of10 years, plus two 10-yeafr renewal options, YRC said. The sale included two the company said. Appraiser’s office records list the property as havin a total building areaof 295,000 square built in 1972, on 21.5 acres. The transaction appears to be reflectesdin YRC’s first-quarter SEC filiny as a March 31 offics complex deal for $22.5 million, which minusz transaction costs equaled $19.8 million. Annual lease payments will beabout $3.4 million. the assets and long-term debt in the amount of the proceeds remainon YRC’s balanc e sheet. Half the proceeds went into an escrow the rest were used to paydown YRC’s credit the filing said.
The price, about $76 a squar e foot, is consistent with that of oldedr Class B office properties in SoutherhnJohnson County, said Tim Schaffer, executivse vice president of . Office buildings in that area can rangrefrom $70 to $160 a square foot for Clasxs B-minus through Class A space and variousx tenant situations, he said. The propertg never was publicly on the Schaffer said. Other price factorsz include the tenant’s credit, the reuss potential of buildings, the risk the buildings’ age, the agreed-upon rent, and taxesd and operating costs.
“You’ve got to assume when you’re buying it that you’ve got a good ulteriod plan in case thatcompanty doesn’t exist at some poingt during that 30-year lease,” Schaffer “It speaks to the quality of the locationj for a group to take that level of The headquarters, which looms over Interstates 435 on Roe Avenue, offere “some pretty amazing opportunities that don’t exisr anywhere else in a mature environment like he said. Analyst David Silver of said YRC’s propertyt sales provide vital liquidity in theshort term. Long they force YRC to focus on its core holding s and integrate intoa single, solid he said.
YRC seems to be accepting low offers, said who doesn’t own YRC shares. “Peopld that they’re selling to see blood in thewater they’re really taking advantage,” he said. “Threed years ago, if they had sold, they woulr have gotten much better values. But they’rwe getting somewhat fair values.” YRC which posted a $257.34 million loss in the first quarter has cut wages in exchange for ownershi inthe company, eliminated thousands of amended bank covenants and begun negotiating to defed $120 million in union pension fund payments using real estate as collateral.
With slumpinbg freight volumes, the company acceleratex the integrationof subsidiaries, creating excess propertu and layoffs. In the second YRC expects to doabout $200 million in Chairman and CEO Bill Zollarss said in a recent presentation. The companyg plans at least $100 million in excess property salesdthis year, he said. Analyst Lee Klasko of , who doesn’t own YRC predicted earnings of 2 cents a share for allof 2010. Silverr estimated a return to profitability by the seconf quarterof 2010.
No comments:
Post a Comment