SITQ Taking Bentall Corp. Private

The offer expired at 5:00 p.m. on Tuesday. SITQ was to pay for the shares today, giving SITQ and its affiliates and associates approximately 27.9 million common shares of Bentall, or 98.8% of the company's outstanding common shares. Pursuant to the Canada Business Corporations Act, SITQ says it now intends to acquire all of the shares held by persons who have not accepted the offer.

SITQ is a longtime shareholder in Bentall. Prior to the tender offer, the company owned about 53% of Bentall and had a $6 billion portfolio comprised of 34 million sf distributed among 170 buildings and six countries. At last count, Bentall had 6.2 million sf of real estate under its belt with an aggregate value of $1.9 billion. Bentall US, its Bellevue, WA-based subsidiary, is responsible for 55% of the company's total revenue.

The privatization is occurring at a time of significant activity for Bentall. In addition to unloading a $560-million, five-property portfolio, it has begun construction of the 566,000-sf, 33-story Bentall Five office tower in Vancouver.

The first 20 stories, totaling 330,000 sf, are currently under construction and slated for occupancy by August 2002. The remaining 236,000 sf or 13 stories would be added to the top of the tower in a second phase, the timing of which will be based on the strength of the market. Timing of the second phase is dependent upon pre-leasing.

Chris Stokes, director of leasing for Bentall V, tells GlobeSt.com that the Canadian developer has thus far preleased 51,000 sf of the first phase to Canfor Corp. and Harris & Co., a major Vancouver law firm. Rates for the first phase (for a typical 10-year lease to a sizeable tenant) will run $28 per sf (Canadian) for five years, then $31 per sf for the second five years, with a $30 per sf allowance for tenant buildouts, says Stokes.

As for the portfolio disposition, Bentall Corp. is selling two eastside office properties and three others in Southern California. One of the properties, the 200,000-sf Sammamish Park Place office project in Issaquah, sold to Schnitzer Northwest last week for about $40 million. Also on the block are the 560,000-sf Millennium Corporate Park in Redmond, the 196,461-sf Bentall Executive Center in Santa Ana, the 284,369-sf One Pacific Plaza in Huntington Beach and the 487,404-sf 1888 Century Park East office tower in West Los Angeles.