This January, as GlobeSt.com reported, KanAm's $579-million US Grundinvestment fund, which has ownership in shopping centers owned by troubled Mills Corp., was frozen. Two days later, its $3.8-billion European Grundinvestment fund was also frozen. A UBS Investment Research report suggested this might require KanAm to sell off some of its assets in order to raise liquidity.

The SEC has called on Arlington, VA-based Mills to restate earnings beginning in first quarter 2000 through third quarter 2005 As GlobeSt.com/RETAIL reported. Subsequently, Mills accepted resignations from 17 company executives and halted plans for 10 development projects.

On Feb. 17, a KanAm spokesman stated that, "We are sounding out different options that will lead to reopening our funds. Selling a portfolio is just one of these options."

According to a published report, however, KanAm has enlisted Eastdil Secured to market a five-building US portfolio aggregating almost 2.9 million sf, which includes Four Penn Center. Two Chicago buildings and one each in Phoenix and Minneapolis are also in the portfolio. A call to Eastdil was not returned by deadline, nor was a call to Atlanta-based WestWind Capital Partners, which serves as KanAm's US advisor. Independent sources have confirmed the potential sale for GlobeSt.com.

Four Penn Center was built in 1964 as the Reliance Insurance Co. Building. Facing liquidation, Reliance sold it to Leggat in 1999 for approximately $14 million and invested more than $80 million in renovations before selling it to KanAm. Among its tenants are Sunrock Capital, the law firm of Post & Schell, Chubb & Son and the McCormick & Priore law firm. At the time of KanAm's purchase, GlobeSt.com reported that it was 90% leased.

Instant Insights /

KanAm Contemplates Sale of Four Penn Center

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