Triple Net, Wachovia Deal in 'Billions'

SANTA ANA, CA-Triple Net Properties and Wachovia Bank have entered a strategic relationship that will mean billions of dollars in financing for Triple Net deals and will also provide for Wachovia to share profits from some Triple Net deals through "participating debt." Louis Rogers, president of Triple Net, tells GlobeSt.com that the tenant-in-common sponsor's new agreement with Wachovia is a "two-pronged relationship" that will provide "billions of dollars of acquisition loans and also other loans and investment banking-type products through Wachovia Bank and Wachovia Securities."

Rogers says further that the relationship will provide financing for the Santa Ana-based company's TIC deals as well as its existing non-traded REITs. Among these are its new $1-billion apartment REIT, called NNN Apartment REIT.

The first prong of the deal with Wachovia is a "participating debt" investment that Wachovia has made in Triple Net. The participating debt is a loan, not equity, but the loan "participates in profits," Rogers says.

The other prong is an agreement that Triple Net "will borrow the majority of its acquisition debt from Wachovia," Rogers tells GlobeSt.com. He adds, "We will still be borrowing from other lenders and Wachovia will still be lending to other borrowers."

In addition to its TIC deals, Triple Net will borrow the acquisition financing for deals executed by its G-REIT, its T-REIT, the new apartment REIT, another new REIT that is in registration for $2 billion and Triple Net's co-investment programs.

Rogers tells GlobeSt.com that the new relationship with Wachovia is the result of Triple Net's experience in borrowing from the bank for a number of recent deals. "The relationship with Wachovia started with just them as a lender and us as a borrower, but we discovered that we worked together so well that we became colleagues," Rogers says.

One aspect of working with Wachovia that drove the deal is that the bank "has empowered its loan officers with authority to make decisions rapidly and cooperatively," Rogers explains. According to Bill Green, managing director and head of real estate capital markets at Wachovia Securities, the new relationship will enable both parties "to benefit considerably from our shared expertise."

Rogers notes that Triple Net will continue to maintain financing relationships with other capital sources, such as its recently announced $10-million revolving credit facility with LaSalle Bank. The credit facility will be used to make deposits and pay closing costs in connection with property acquisitions for Triple Net's real estate programs and to provide working capital for general corporate purposes.