Spieker 25% Done With $400-Mil Staged Disposition to CalPERS via Rreef

Spieker's chief investment officer Eli Khouri tells GlobeSt.com that the company is not unloading its entire industrial portfolio, simply unloading assets--to which it has added substantial value over the years, and many of which the company built up from raw land--in an effort to focus on the company's current primary strategy.

"When we sell things, it's just a matter of redeploying our capital in concert with our strategy, which is predominately focused around owning and developing office buildings in great concentrations in the best West Coast submarkets," says Khouri, adding that a prime example of that strategy is Kruse Way, a high-rent submarket just a few miles south of Portland on the east side of Interstate 5 in which Spieker holds upwards of an 80% marketshare.

Calling the decision to sell so much to one buyer "the right balance of price and efficiency," Khouri says the proceeds from the disposition are being spent on 10-31 exchanges and new development. Spieker's brokers for the ongoing deal are Jay Borzi and Steve Silk of Los Angeles-based Secured Capital. "These guys are super professionals who have executed for us in the past," says Khouri. "We've built up a lot of confidence in their ability to deliver."

Better than half the 8.3 million sf being sold to CalPERS via Rreef is located in the Portland area, where the company owns more than 4.2 million sf in about two dozen buildings. According to Spieker's Web site (www.spieker.com), the properties are near the airport in Portland proper and also in the suburban cities of Tigard, Wilsonville and Beaverton. In Northern California, the company is selling all of its "North Bay" portfolio, of which 744,167 sf still remains to be traded, and the better part of its 4.6-million-sf "East Bay" portfolio.

Two years ago, Spieker sold much of its Seattle industrial portfolio to Rreef, which oversees some $12.4 billion in pension fund real estate investments. "We are extending a track record of transactions with Rreeff," says Khouri. "It's a relationship we value because of their performance in these kinds of transactions."

Spieker will release its fourth-quarter and year-end earnings after markets close this afternoon. Earlier this month, Goldman Sachs returned the real estate company to its recommended list and raised its 2002 funds from operations estimate for the company by 10 cents, to $5.70 per share. In morning trading, Spieker's share price stood unchanged from Friday's close at $51.31, off several dollars from its 52-week high of $59.12 on Sept. 16, 2000, and well above its 52-week low of $38.81 on Jan. 31, 2000.