Real estate investment banking firm W.P. Carey & Co. LLC hascompleted the acquisition of two net-leased properties on behalf ofmember company Corporate Property Associates 14 Inc., a non-tradedREIT. Both facilities were purchased from Atrium Cos. Inc. for$16.2 million. Included in the deal are a 400,000-sf manufacturingand distribution facility in Welcome, NC and a 165,000-sf plant inMurrysville, PA, also a manufacturing and distribution center.

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Meanwhile, Lexington Corporate Properties Trust has acquired twowarehouse properties in Hebron, OH in a $13.6-million transaction.The first property is a 400,522-sf warehouse built in 1999 on 21.6acres. It is leased to Owens Corning until 2009. The secondfacility is a 250,410-sf warehouse built last year on 13.6 acres.Its lease, also with Owens Corning, expires in 2010.

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Sale-leaseback deals have become increasingly popular as theeconomy continues to flounder, providing sellers with quickliquidity and buyers with low-maintenance properties andcreditworthy tenants locked into long-term deals. Lexington onMonday expanded by $200 million an existing joint venture createdspecifically for the acquisition of net-leased properties.

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Lexington president T. Wilson Eglin says he expects a near-termincrease in sale-leaseback investment opportunities. "In a sloweconomy we see more sale leaseback opportunities," Eglin tellsGlobeSt.com. "When the economy is strong we find more opportunitiesin the build-to-suit area. Volume in each of those categories seemsto fluctuate with the economy. In the last couple of years we'vebeen involved in more build-to-suits. Over the next 12 to 18 monthswe expect to see more sale-leasebacks."

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According to W.P. Carey executive director Gordon J. Whitingsale-leaseback deals are "definitely growing every day. It's agreat way for companies to raise money," he tells GlobeSt.com."They can take a depreciating asset that's on their balance sheet,sell it and monetize it to full fair market value."

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Whiting says the explanation for what was once a$30-million-per-year market at W.P. Carey exploding into what iscurrently a $400-million-per-year phenomenon at the firm istwofold. "For one thing it's been an education of CFOs, CEOschairmen and presidents of companies," Whiting says. "The otherthing is that now we're in a credit crunch where lenders are not aswilling to lend." Sale-leaseback deals, he says, give a companymore bang for the buck and look better on paper than traditionalmortgages. Best of all, sale-leasebacks allows business owners toinvest in their businesses. "They're better off taking the moneythat's in bricks and mortar and putting it back into thebusiness."

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The latest W.P. Carey deal is its third similar transaction inthree years with window-manufacturer Atrium on behalf of CPA 14. InNovember 1999, Carey arranged CPA 14's acquisition of three Texasfacilities. The following August, Carey assisted CPA 14 inproviding construction financing for a build-to-suit acquisition ofan Atrium industrial facility, also in Texas. The new acquisitionswill be included in the 20-year bond-type net lease of thebuild-to-suit property, which was completed in March.

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