The buyers assume the ground lease, which CenterPoint Properties Trust securitized in June. The 6.641% interest on the bonds sold by the REIT matches the railroad company's $6.5-million-a-year payments on the ground lease. In addition to eliminating debt from CenterPoint's balance sheet, the staggered sale allows the largest industrial property owner in the market to focus on reinvesting $18 million a quarter into 2004, rather than trying to put the entire $91.1 million to use now.
"The structure of this sale should allow CenterPoint to maximize reinvestment returns, key to realizing the full benefit of the $91.1 million lease securitization and sale," says co-chairman and chief executive officer John S. Gates in a statement.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.