Michelle Napoli is editor of Net Lease forum, from which this article is excerpted.

Austin, TX—Inland Public Properties Development Inc., a new subsidiary of Inland American Real Estate Trust Inc., will focus on the government property niche through acquisition and development of assets leased to county, state and federal entities.

President and CEO Chuck Jones is running the locally based subsidiary. It is one of two specialty property subsidiaries--the other is focused on student housing and other multifamily assets--recently formed by Inland Capital Markets Group Inc. of Atlanta on behalf of Inland American, a REIT still in its offering stage and sponsored by Oak Brook, IL-headquartered Inland Group of Cos.

Jones is the former CEO of CentraCore Properties Trust, an owner of correctional facilities that was purchased by the GEO Group Inc. of Boca Raton, FL earlier this year. Jones tells NET LEASE forum that Inland American had been interested in CentraCore but was not the winning bidder. Ultimately, Inland American hired a number of CentraCore executives, including Jones. "We're really doing the same business, but on a wider platform," Jones explains.

Inland Public Properties will look at sale-leasebacks of existing properties among potential transactions, but a significant source of opportunity is expected to be build-to-suit development of properties that will be net leased to a government entity, Jones says. They will include properties leased to the federal government's General Services Administration, but Jones sees greater opportunity at the state and local levels. That's because the company can get involved with state legislators or county commissioners during the planning process, he says. States with significant population growth, including Arizona, California, Nevada and Texas, will be likely target markets for the company. And finally, Inland Public Properties will focus on properties that are essential to the governments' day-to-day operations, such as office buildings, court houses, prisons and healthcare facilities.

Inland American, Jones says, "is looking at a broad array of platforms in the real estate arena, and the governmental sector is one that has gotten a lot of attention in the past several years." The former Government Properties Trust Inc. of Omaha, which had its IPO in early 2004, was purchased this spring by Record Realty LLC, a subsidiary of Australian listed property trust Record Realty Trust. And earlier this year Arlington, VA-based Friedman, Billings, Ramsey Group Inc. and former Washington, DC Mayor Anthony A. Williams teamed up to launch Public Properties Realty Investment Trust Inc., which is focused on sale-leasebacks and other net lease structure investments in properties used by government entities and nonprofit organizations.

Instant Insights /

Inland Launches Gov't Properties Arm

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