W. P. Carey Announces $66 Million Acquisition of Automotive Dealership Portfolio
Investment Initiates Strategic Partnership With CapRocq Automotive, LLC
Sep 19, 2012
NEW YORK, NY -- (Marketwire) -- 09/19/12 -- Investment firm W. P. Carey & Co. LLC (NYSE: WPC) announced today that CPA®:17 - Global, one of its publicly held non-traded REIT affiliates, has acquired a portfolio of nine automotive dealerships totaling approximately 380,000 square feet. Three properties are located in Alabama, two in Missouri, and one each in Tennessee, Arkansas, Texas and Louisiana. The portfolio dealerships sell and service market leading brands such as Mercedes Benz, Nissan, Chevrolet, Toyota, Scion, Dodge, Chrysler and Jeep.
The total purchase price was approximately $66 million. The facilities will be leased back to RLJ-McLarty-Landers Automotive Holdings LLC on a triple net basis for a term of 16 years. The acquisition is the first investment completed through a strategic partnership with CapRocq Automotive, LLC ("CapRocq"), formed for the purpose of executing a series of real estate sale-leaseback transactions in the automotive dealership industry.
CapRocq is led by founders Franklin McLarty and Beau Blair, both of whom have extensive experience in the automotive and commercial real estate industries. CapRocq's Advisory Board includes Thomas F. "Mack" McLarty III, president of McLarty Associates and chairman of McLarty Companies, a fourth-generation family transportation business, who served as President Clinton's White House Chief of Staff. Jim Press, CEO of Yanjun Auto and a senior automotive industry executive with over 40 years of experience, also sits on the CapRocq Advisory Board.
Commenting on the strategic partnership with CapRocq, W. P. Carey Managing Director and Co-Head of Global Investments, Jason Fox noted, "The formation of our relationship with CapRocq provides us with the opportunity to acquire commercial real property owned by operators of multi-site, multi-franchised automotive dealerships located in attractive markets throughout the United States and to simultaneously enter into long-term triple net leases with these selling dealers. CapRocq's principals and advisory board provide a wealth of industry knowledge and experience that will be a critical resource in the origination and underwriting process. In addition, they will provide asset management oversight on an on-going basis for acquired assets. Their operational expertise and industry relationships will be a crucial component in executing this strategy."
Mr. Fox added, "We view this initial transaction and the ongoing strategic relationship as an opportunity to generate strong risk adjusted returns from dealers whose steady cash flows are derived from multiple sources of revenues including new and used cars sales, vehicle servicing, financing, and insurance contracts. The significant variable cost component of the business model adds both diversity and further stability to these properties, in line with our objective of providing consistent long-term income to our investors, thereby providing a strong addition to our managed funds. We look forward to working with CapRocq on other acquisition opportunities."
Franklin McLarty, co-founder of CapRocq, commented, "Our relationship with W. P. Carey establishes a solid source for future long term financings. Together, we intend to grow the lease portfolio on attractive terms as dealers seek options to unlock real estate value, diversify holdings and access capital to expand existing operations or develop or acquire new dealerships and franchises. We are excited to be aligned with a strong partner who appreciates the critical role these assets play in the automotive industry."
Stradley Ronan Stevens & Young, LLP acted as legal advisor to CapRocq.
Reed Smith LLP represented CPA®:17 - Global as general real estate and transaction counsel in connection with the closing.
W. P. Carey & Co. LLC
W. P. Carey & Co. LLC (NYSE: WPC) is an investment company that provides long term sale leaseback and build to suit financing for companies worldwide and manages a global investment portfolio of approximately $12.7 billion. Publicly traded on the New York Stock Exchange (WPC), W. P. Carey and its CPA® series of non-traded REITs help companies and private equity firms unlock capital tied up in real estate assets. The W. P. Carey Group's investments are highly diversified, with approximately 284 long term corporate tenants spanning 28 industries and 18 countries. http://www.wpcarey.com
CapRocq Automotive, LLC
CapRocq Automotive, LLC ("CapRocq") is an asset management company focused on origination, underwriting and oversight of commercial real property used by operators of multi-site, multi-franchised automotive dealerships located in attractive markets throughout the U.S. CapRocq has a strategic partnership with W. P. Carey & Co. LLC's publicly held non-traded REIT affiliate CPA®:17 - Global.http://www.caprocq.com
RLJ-McLarty-Landers Automotive Holdings, LLC
RLJ-McLarty-Landers Automotive Holdings, LLC ("RML"). RML is comprised of several limited liability companies which are co-owned by The RLJ Companies, LLC, headquartered in Bethesda, Maryland and McLarty-Landers LLC, headquartered in Little Rock, Arkansas and consists of 35 automotive franchises and three Harley-Davidson motorcycle dealerships across the South Central, Southeast and Midwest regions of the country. RML has recently been recognized as one of the premiere privately held automotive retailer in the country, the largest minority owned Dealership Company and placed No. 19 on the 2012 Automotive News list of the top 125 dealership groups in the U.S.
This press release contains forward-looking statements within the meaning of the Federal securities laws. A number of factors could cause the W. P. Carey's actual results, performance or achievement to differ materially from those anticipated. Among those risks, trends and uncertainties are the general economic climate; the supply of and demand for office and industrial properties; interest rate levels; the availability of financing; and other risks associated with the acquisition and ownership of properties, including risks that the tenants will not pay rent, or that costs may be greater than anticipated. For further information on factors that could impact the Company, reference is made to the Company's filings with the Securities and Exchange Commission.
W. P. Carey & Co. LLC
Ross & Lawrence
Source: W. P. Carey & Co. LLC