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SOUTH WINDSOR, CT-The New York City-based real estate investment banking firm W.P. Carey & Co. LLC, reports it has closed on a $19.7-million sales/leaseback deal with Gerber Scientific Inc.

The deal, announced yesterday, involves three single-story Gerber Scientific buildings in the Greater Hartford area. Under terms of the sale/leaseback transaction, Corporate Property Associates 14 Inc., (CPA(R):14), a member of the W.P. Carey Group, has acquired Gerber Scientific’s corporate headquarters at 83 Gerber Road West in South Windsor, a 194,000-sf office/light assembly building on 13.74 acres. In addition the trust has also purchased 55 Gerber Road West in South Windsor, a 60,000-sf office/light industrial property on 5.18 acres and 151 Batson Drive in Manchester, a 93,500-sf office and industrial facility on 9.36 acres. The three properties were leased back to Gerber by Corporate Property Associates 14 Inc., a public, non-traded REIT, in a deal structured as part of a 17-year bond-type net lease with two additional 10-year options.

As part of the sale/leaseback deal, Gerber will continue to occupy the three properties and retains the responsibility for maintaining the premises, as well as insuring the buildings and paying real estate taxes, company officials say.

Gerber Scientific is involved in signage, specialty graphics, apparel and flexible materials and optical lens processing. The firm employs approximately 800 workers in the Greater Hartford area and 2,600 worldwide. The three buildings house employees with Gerber Scientific and its two subsidiaries Gerber Coburn Optical, Inc., and Gerber Scientific Products. In addition, the company still owns 24 Industrial Park Road West, a 119,664-sf office/manufacturing building in Tolland, CT., that houses subsidiary Gerber Technologies and its SignStory Inc. operations.

Company officials say that funds from the transaction have been used to pay down corporate debt. The company, which has undertaken restructuring actions aimed at reducing operating costs by $30 million to $35 million, previously reported earlier this year that it had received $12 million from a sale/leaseback transaction involving a facility based in Bristol, U.K. which was owned by the company’s Spandex PLC subsidiary.

“A sale-leaseback transaction simply converts real estate into cash, which can then be more effectively used,” states Lynn M. Wytas, treasurer of Gerber Scientific Inc. “Debt reduction continues to be our focus, and monetizing a capital asset helps us to achieve our goal of lowering the company’s leverage.”

Edward V. LaPuma, executive director of W. P. Carey tells GlobeSt.com, “W. P. Carey and its affiliate, CPA(R):14, target middle-market tenants and private companies with an eye toward providing creative financing solutions to meet their corporate real estate needs. When a company removes real estate from its balance sheet, it is then able to reallocate this much-needed capital to pay down debt, or finance other corporate initiatives.”

He continues, “After careful credit analysis and working closely with Gerber Scientific management, we were able to tailor this transaction to meet Gerber’s specific needs. The sale-leaseback arrangement of these properties will enhance CPA(R):14′s already diverse portfolio and provide further stability.” As of June 30, 2001, the trust’s portfolio contained 73 properties net-leased to 45 tenants throughout the United States with total assets of more than $780 million.

LaPuma notes that as the economy continues to struggle, W.P. Carey is starting to see a significant increase in corporations seeking to sell their real estate assets as a means of raising capital.

However, he adds that some prospective sellers still have expectations of obtaining values that existed 18 months ago. Therefore, he charges that “there is a buyer/seller disconnect at the moment.”

Since April, W.P. Carey has engaged in a number of large sale/leaseback deals, including a $22 million transaction with Gibson Guitar Inc. on four properties in Nashville, Illinois and Montana; a $13.6 million deal with Nexpak Corp. on its 221,374-sf manufacturing and distribution facility in Duluth, GA and a $37.7 million sale/leaseback transaction with Special Devices Inc. on two facilities in California and Arizona.

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