Allco Puts U.S. Government, German Telecom Properties on Market, Seeks $1.2B
- Apr 11, 2008
Nearly one year after it closed on the acquisition of Omaha-based Government Properties Trust Inc. and took the REIT private, Australian investment giant Allco Finance Group is looking to sell all 22 U.S. properties along with seven German properties to pay off debt.Reuters reported today that debt-ridden Allco, which has been hit hard by the global credit crisis, was seeking to sell the U.S. portfolio which it runs through its property fund, Record Realty Trust. The wire service noted the properties have an asset value of about $653 million. The assets are located in 14 states and are leased to federal government departments, such as the Federal Bureau of Investigation, U.S. Army Corps of Engineers, Drug Enforcement Agency, the Internal Revenue Service and the Social Security Administration. CPN reported April 16, 2007, that Allco subsidiaries had closed on the purchase for $10.75 a share, or about $223.6 million. The CPN article noted that at the time of the sale, the properties totaled nearly 2 million square feet and were about 98 percent occupied in long-term leases.Allco also wants to sell seven German properties that have long-term leases with Deutsche Telekom and are valued at about 350 million euros, or $553.7 million, according to the Reuters story.Record Realty Trust will also likely sell off its Australian assets, which include the Australian Stock Exchange Building in Sydney, according to a March 29 story by Danny John in the Sydney Morning Herald. John reported that Record Realty Trust alone is carrying debt of $1.8 billion. The sale announcement came the same day that Allco reported a bank review of its $1.07 billion loan facilities has been extended until May 2.