A Set of Different Commercial Properties Acquired by Realty Income

March 07, 2011 / Albert Hamon, Mergers and Acquisitions Reporter

Real estate company, Realty Income Corporation has recently announced its recent business venture of acquiring 33 commercial properties under a long-term lease contract for about $544 million. According to company information, majority of the commercial properties, which include single tenant, office, manufacturing, retail, and distribution assets, will close within the first two quarters of 2011.

A Set of Different Commercial Properties Acquired by Realty Income

Another set of commercial real estate properties — office buildings located in Orange County, California, were recently acquired by another real estate company, Irvine Co. The whole commercial property has an excellent access to a freeway, on-site and walking distance amenities, well-designed and efficient building structure, and a large parking space.

Realty Income Corporation’s soon-to-be acquired commercial properties consist of about 3.8 million square feet of rentable space, and are located in 17 different states across the United States.

About 34 percent of the total commercial properties are represented by single-tenant distribution assets including International Paper, FedEx Corporation, Aviall Services, and Caterpillar.

The 33 percent of the lease are from single-tenant retail assets, which include Walgreens, Regal Cinemas, Cinemark Theaters, and AMC Theaters.

The other 25 percent of the commercial properties are from single-tenant office assets including T-Mobile USA, Solae, Novus International, and Fiserv, Inc., and the last 8 percent are from single-tenant manufacturing assets, which are represented by prime manufacturing companies including MeadWestvaco Corporation and Cocal Cola.

The Chief Executive Officer at Realty Income, Tom A. Lewis said the recent acquisition is inline with the company’s expansion into net-lease single-tenant properties.

But, Lewis said that the worth $544 million portfolio commercial properties has about $291 million of current mortgage debt. The company has anticipated paying about $223 million of the mortgage debt after the completion of the transaction.

According to the information, the average leasing term agreement of the commercial properties is over eleven years.

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