W.P. Carey Closes $58M Sale-Leaseback in Germany
- Aug 20, 2008
New York City-headquartered W.P. Carey, acting through its publicly held non-traded REITs CPA(R):15 and CPA(R):17 – Global, has completed a sale-leaseback transaction in Germany with U.K.-based automotive supplier Wagon Plc. The properties involved are Wagon’s manufacturing facilities in Waldaschaff and Nagold, and, as per terms of the agreement, W.P. Carey will shell out an additional $10.5 million to facilitate the autotomotive components company’s manufacturing plant expansion plans. In addition to supplying financing to increase the size of its manufacturing plants, the sale-leaseback deal provides Wagon with the financial wiggle room to funnel money into other growth initiatives, and to repay existing debt facilities. Wagon joins a group of industrial companies that have recently found a new lease on life, so to speak, with W.P. Carey through the disposition of their German-based plants. At the end of last month, the investment firm closed an $18 million sale-leaseback transaction with The Leipold Group through CPA(R):16, snapping up three of the engineering and telecommunications parts supplier’s German manufacturing plants and one facility in the U.S. Also in July, W.P. Carey, announced a $30 million sale-leaseback through CPA(R):16 with Sc hoeller Arca Systems for the reusable transit packaging developer’s Monheim, Germany, and Nurieux, France properties. July also brought a $58 million deal through CPA:16 and CPA:17 with IT distributor Arques Industries for its Soest and Bad Wünnenberg, Germany, properties, which were leased back to Arques’ portfolio company Actebis AG; Actebis maintains its global headquarters at the Soest location, while the Bad Bad Wünnenberg site serves as a logistics facility. All of Europe has long been a playground for W.P. Carey, even more so now. “The market as a whole has undergone tremendous change,” Jeffrey Lefleur, executive director with W.P. Carey, told CPN. “A large part of our competition has disappeared or has largely been unable to compete because of the credit crisis.” In June W.P. Carey opened an office in Amsterdam, its second European location–the first is in London–to serve as ground zero for the management of the financing and investment firm’s expanding European property portfolio. To date, the company has a European portfolio of nearly $3 billion in assets under management. Germany, as recent transactions indicate, is of special interest to the company these days. “Germany, in particular, is a country where traditional forms of long-term corporate finance have been tough to access for mid-size industrial companies,” Lefleur said. “Traditional German banks have shied away from financing growth initiatives in the form of long-term capital for industrial companies; they have become less and less enthusiastic about lending to these companies.” The Wagon transaction was a partnership deal, of sorts, for W.P. Carey. New York City-based investment firm WL Ross & Co. L.L.C. also just completed a $70 million investment in Wagon, contributing approximately $70 million of new capital through a special rights offering of Wagon common shares. “We were excited that we were able to do a deal in conjunction with Wilbur,” said Lefluer. “We are proud of our growing business in the U.S. and internationally with private equity funds, and that we can step up and provide sophisticated investors with alternative capital, as well.” W.P. Carey, which provides long-term sale-leaseback financing for companies seeking means to grow their businesses or pay down debt, has a global portfolio totaling over $10 billon in assets. Its real estate holdings encompass over 850 commercial and industrial properties in 14 countries.