Given IPC US REIT's 9.6 million-sf portfolio, its sale toBehringer Harvard translates to $145 per sf, which is below thecompany's net asset value. For example, industry sources sayBehringer Harvard allocated $36.3 million ($143 per sf) of the$1.4-billion purchase price to Bank of America Plaza, which IPC USREIT acquired in February 2005 for $72 million or $283 per sf.


David Dinniwell, EVP and CFO for the Toronto-based IPC US REITtold in August that the pure-play US office REITstarted to explore its options as value differentials narrowedbetween Canadian and US currency. It did consider remaining apublicly traded REIT. "But, our ability to grow with interest rateswhere they are right now was constrained," Dinniwell said.


The Canadian REIT upped its distribution percentage "numeroustimes" in the past five years to combat value differences,according to Dinniwell. "The value distribution when converted toCanadian dollars declined due to the appreciation of Canadiandollars since the inception of the REIT," he explained. "Our yieldsare considerably higher. It seems people haven't appreciated whatwe've done. It's a function of where our stock prices are tradingrelative to our distribution. The board decided it was an opportunetime to capitalize on current real estate value for unitholders."


Like the rest of the IPC US REIT portfolio, the Bank of AmericaPlaza is a very stable asset for Behringer Harvard. When IPCacquired the property it was 95% leased and that remains truetoday. Bank of America leases approximately 23% of the buildinguntil 2015. Due to the building's proximity to the new FederalCourthouse, the Clark County Courthouse and the new RegionalJustice Center, several law firms also occupy the building.

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