EL SEGUNDO, CA-Satellite television provider DirecTV has signed a new five-year lease with Boston-based Newkirk Realty Trust for 205,000 sf of headquarters space. The deal starts in January 2009 at $2.74 million per year, with 2% annual increases, or a total of nearly $13.5 million over the five-year term of the lease.
DirecTV now occupies its headquarters at 2230 E. Imperial Hwy. as a subtenant of Raytheon. The new lease is a direct deal with Newkirk Realty Trust, which represented itself, with DirecTV represented by Grafton Tanquary of the South Bay office of CB Richard Ellis.
With this new lease, the entire 550,000 sf of office space at the El Segundo property is leased through 2013, with 345,000 sf leased through 2018. Newkirk, which is in the midst of a pending $4.6-billion merger with New York City-based Lexington Corporate Properties Trust, also refinanced the mortgage on the El Segundo property in conjunction with the new lease. The new financing is a first mortgage of $55 million that bears interest at 5.675% and matures on December 5, 2016.
As reported previously on GlobeSt.com, the merger of Newkirk and Lexington was approved when shareholders representing some 37.8 million outstanding Lexington common shares voted in favor of the merger. As part of the deal, Michael L. Ashner, CEO and chairman of Newkirk's board, will join Lexington as executive chairman.
Lexington's CEO, T. Wilson Eglin, said in a statement that the transaction "will improve the quality of our portfolio and our tenant base and will significantly strengthen our balance sheet by adding cash and lowering our overall debt level to approximately 45% of our enterprise value." Eglin noted that "a majority of Lexington's portfolio will be leased to investment grade tenants."
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