Carey Institutional Properties Acquires Two Humco Holding Operating Facilities
Equity Participation Will Enhance Investment Returns For Institutional REIT Shareholders
NEW YORK, NY – March 2, 1999 – W. P. Carey & Co. LLC, a leader in the ownership and net leasing of corporate properties, announced that it has completed the acquisition of the two operating facilities of Humco Holding Group, Inc. on behalf of Carey Institutional Properties (CIP®). CIP®, a public non-traded real estate investment trust (REIT), is a member of the $2.5 billion W. P. Carey Group. The properties acquired are located in Texarkana, Texas and Orem, Utah and are leased to Humco Holding Group, Inc. under a 17-year bond type net lease. The transaction has been structured to allow CIP® to participate in future equity appreciation of the company. The purchase price of the facilities was approximately $7.8 million.
The Humco facility in Texarkana, Texas is located on the border of Texas and Arkansas, along I-30. This 124,500 square foot facility serves as principal office, manufacturing and warehousing area for the Humco Holding Group.
The 73,940 square feet facility in Orem, Utah situated in an industrial business park 40 miles south of Salt Lake City, houses Humco’s Alpine Health Industries division. The division is responsible for tableting and encapsulating dietary supplements.
Humco Holding Group, Inc. is a state of the art proprietary dietary supplement and over-the-counter pharmaceutical manufacturer and marketer, with research and developmental capabilities. Humco supplies quality branded and private label products to the mass market. Alpine Health Industries, an affiliate of Humco, is one of the largest encapsulating and tableting companies in the dietary supplement industry with a total encapsulation capacity of approximately 2.3 billion capsules per year and a total tableting capacity of 2.1 billion tablets per year.
Commenting on the investment, CIP® Executive Vice President and Portfolio Manager Edward V. LaPuma noted, "In Humco, we recognized an unusual opportunity with the potential for significant future upside. Given its strong product lines and the expanding market for vitamins and pharmaceutical products, Humco has the potential for growth that we look for in our corporate tenants. In addition, we believe the sale leaseback financing will allow the company to strengthen its balance sheet by unlocking capital that was tied-up in real estate assets. The transaction that W. P. Carey structured will allow Humco greater financial flexibility where, for example, it can pay-down debt and invest in the development and marketing of new products."
Founded in 1973, W. P. Carey & Co. specializes in corporate real estate financing using the corporate net lease, or sale-leaseback structure. The firm, and its affiliates, is one of the largest lessors of net leased corporate real estate in the nation. The W. P. Carey Group manages the largest publicly traded limited liability company listed on the New York Stock Exchange and four real estate investment trusts (REITs). Collectively, Carey manages over 34 million square feet of property located in 41 states. The W. P. Carey Group’s properties have an aggregate value of approximately $2.5 billion.
This press release contains forward-looking statements within the meaning of the Federal securities laws. A number of factors could cause the company's actual results, performance or achievement to differ materially from those anticipated. Among those risks, trends and uncertainties are the general economic climate; the supply of and demand for office and industrial properties; interest rate levels; the availability of financing; and other risks associated with the acquisition and ownership of properties, including risks that the tenants will not pay rent, or that costs may be greater than anticipated. For further information on factors that could impact the company, reference is made to the company's filings with the Securities and Exchange Commission.
