W. P. Carey Group Closes on Acquisition of Buffets, Inc. Eagan, Minnesota Headquarters Facility
$20.9 Million Sale-Leaseback Part of Financing for Caxton-Iseman Capital, Inc.'s Buyout
NEW YORK, NY – October 11, 2000 – W. P. Carey & Co. LLC (NYSE: WPC), a leader in the ownership and net leasing of corporate properties, announced today that it has closed on the acquisition of the headquarters facility of Buffets, Inc. The acquisition was on behalf of Corporate Property Associates 14 Incorporated (CPA®:14), a publicly held, non-traded real estate investment trust (REIT) which is a member of the $2.5 billion W. P. Carey Group.
The acquired facility consists of 100,000 square feet of Class A office space situated on a 15-acre site approximately fifteen miles south of Minneapolis, MN and twelve miles south of St. Paul, MN. Located in Eagan, MN, a rapidly growing suburb located south of the Mississippi River, the building has ready access to Interstate 35-E, a major artery into St. Paul. Under the terms of the sale-leaseback transaction, the facility will be leased to Buffets, Inc. under a 20-year, bond-type net lease. The purchase price was approximately $21 million.
The sale-leaseback transaction with Buffets, Inc. was done as a part of the financing of the Management Buyout (MBO) of Buffets, Inc., in which Caxton-Iseman Capital, Inc., a New York investment firm specializing in buyouts, was the equity provider.
Founded in 1983, Buffets, Inc. is one of the largest operators of high-quality, buffet-style restaurants in the United States, with more than 400 locations in 38 states. In addition, Buffets franchises 24 restaurants in ten states. Operating mostly under the Old Country Buffet and HomeTown Buffet brands, the company's locations are self-service buffets featuring entrees, sides, and desserts for an all-inclusive price. Buffets' other brands include Original Roadhouse Grill, Granny's Buffet, Country Roadhouse Buffet & Grill, Tahoe Joe's Famous Steakhouse, and Soup 'N Salad Unlimited.
Commenting on the transaction, Gordon J. Whiting, Executive Director of W. P. Carey and President of CPA®:14, stated, "This transaction is an excellent example of W. P. Carey's ability to structure sale-leaseback transactions that complement complex financing packages for MBOs and other types of acquisitions. Based on our expertise in designing sale-leaseback transactions that work in tandem with multi-tiered debt and equity structures, Caxton-Iseman invited W. P. Carey to work with them in completing the financing package for the purchase of Buffets, Inc., one of America's largest restaurant companies. To assist in the completion of the MBO financing, W. P. Carey closed on the $21 million sale-leaseback of Buffet's Eagan facility and the proceeds were used to lower the total acquisition cost on advantageous terms."
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 33 million square feet of property in the USA and Europe. 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.
