As the economy continues to recover, more corporations are selling their real estate to unlock the value that's tied up in the property and then leasing the buildings back.
Sharp Electronics, for example, recently sold its U.S. headquarters building in Mahwah for $38 million and leased the property back for 12 years. Similarly, the owner of HackensackUMC Mountainside Hospital in Montclair recently sold the property for $115 million, then signed a 15-year lease.
The two transactions are part of a national trend that has seen sale-leasebacks roughly triple in recent years, from a low of $3.4 billion in 2009, just after the financial crisis, to more than $10 billion annually in the past two years as real estate values headed back up. Investors increasingly seek out the deals because they offer a predictable stream of income; companies think that an expanding economy means they can earn more profits by moving money out of their real estate and into their core businesses.
"The typical reason that a company would do a sale-leaseback is that they think they have better ways to invest their cash than have it tied up in a building," said Ben Thypin, director of market analysis at Real Capital Analytics in New York, a real estate information company.
Read More: http://www.northjersey.com/news/business/sale-leasebacks-making-a-return-1.1251455
In the latest sign that ultraluxury apartment living is spreading far beyond New York and San Francisco, a glass-sheathed tower changed hands in Chicago last week in a deal that is shattering records.
The 60-story building, named OneEleven, was sold for $328.2 million, or $651,000 per unit, the highest price ever paid per unit for an apartment building of more than 50 units in Chicago. The 504-unit building, located in Chicago’s downtown Loop neighborhood, was sold by a unit of New York-based Related Cos. and was acquired by Heitman, a global real-estate investment-management firm based in Chicago.
The purchase price “is emblematic of the seemingly insatiable demand for high-quality, large real-estate assets in primary markets,” said Ben Thypin, director of market analysis for Real Capital Analytics, a commercial-real-estate data and analysis firm in New York.
The sale of Menlo Park's Sand Hill Commons may have just set a new record for suburban office buildings not only in the Bay Area, but also nationally.
An affiliate of Invesco Real Estate just paid a staggering price for a partial interest in the 12-acre complex on famed Sand Hill Road.
How much? Try about $1,800 per square foot for a 49 percent stake in the property, according to a source with knowledge of the transaction. Other parties with knowledge of the deal declined to confirm the price.
The deal, which closed Wednesday, values the 133,000-square-foot Commons at just shy of $240 million. That's a larger number than we reported last month.
If confirmed, the price could be seen as something of a proclamation that the historic venture capital epicenter is still some of the most valuable real estate on the planet, despite increasing competition from hipper locales such as downtown Palo Alto and San Francisco — a topic we explored last year in depth. Indeed, the per-square-foot value would be a national record for suburban office deals larger than 50,000 square feet, said Ben Thypin, director of market analysis for Real Capital Analytics in New York.
"The properties that have traded at higher per-square-foots are less than 50,000 square feet and in places like Beverly Hills, and have substantial retail components, whereas this is a pure office property," Thypin said in an email.
Read More: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2015/01/sand-hill-road-office-sale-may-set-new-national.html
Ben Carlos Thypin
I am currently the co-founder of Quantierra, the world's first data driven real estate brokerage and investment manager. In my former life as Director of Market Analysis at Real Capital Analytics, I worked with press outlets large and small to provide them with great data and insightful commentary. Here are some of the results of this collaboration. For the rest, please check out the News Archive.