http://jayetradefair2010.org/city/21
But it didn’t go far. A group of locakl investors led by Ken Block andStevd Block, principals of Kansas City real estate firm , boughtr the Overland Park headquarters in a sale-leasebac deal that includes a potentia l 30-year lease for YRC. The company did not disclosee the priceor buyer, and Ken Blocj said he couldn’t commentt because of a confidentiality agreement, but a YRC Securitiexs and Exchange Commission filing suggests the purchase price was $22.54 million. Johnson County lists the property’s appraised valued at close to $25 million.
“The monetizatio n of real estate assets is a part ofYRC Worldwide’zs ongoing financial strategy to weather the recession and enhance its liquidity position,” YRC said in a statementy e-mailed to the Kansas City Business Journalo . “The YRC Worldwide corporate headquarters is and will continuw to be located in theOverland Park, location.” YRC said the deal was part of $176 millionb in property sales and sale-leasebacks completed in the first which ended March 31. But accordinh to the , the deal closed May 1. The leaser has an initial term of 10 plustwo 10-year renewal options, YRC The sale included two the company said.
Appraiser’s office records list the property as havingb a total building areaof 295,00o0 square feet, built in 1972, on 21.5 acres. The transactiojn appears to be reflectedin YRC’es first-quarter SEC filing as a March 31 office complex deal for $22. 5 million, which minus transaction costzsequaled $19.8 million. Annuak lease payments will be about $3.4 million. However, the assets and long-terkm debt in the amountf of the proceeds remainon YRC’s balancs sheet. Half the proceeds went into anescrowq account; the rest were used to pay down YRC’se credit facility, the filin g said.
The price, about $76 a square is consistent with that of olderr Class B office properties in Southern Johnson saidTim Schaffer, executive vice president of . Officer buildings in that area can rangefrom $70 to $160 a squarwe foot for Class B-minus throughg Class A space and various tenant situations, he said. The propertu never was publicly on the Schaffer said. Other price factors includr the tenant’s credit, the reuse potential of buildings, the risk level, the buildings’ age, the agreed-upob rent, and taxes and operating costs.
“You’ve got to assume when you’rw buying it that you’ve got a good ulterior plan in case thatcompangy doesn’t exist at some point durinf that 30-year lease,” Schafferr said. “It speaks to the quality of the location for a groupo to take that levelof risk.” The which looms over Interstate 435 on Roe Avenue, offers “some prettyy amazing opportunities that don’t exist anywhere else in a mature environment like that,” he said. Analyst David Silver of said YRC’s property sale s provide vital liquidity in theshort term. Long they force YRC to focues on its core holdingd and integrate intoa single, solid he said.
YRC seems to be accepting low said Silver, who doesn’t own YRC “People that they’re selling to see blood in the water they’re really taking advantage,” he “Three years ago, if they had sold, they would have gotte much better values. But they’re getting somewhat fair values.” YRC which posted a $257.4 milliob loss in the first quarter — has cut wages in exchangew for ownership inthe company, eliminated thousandse of jobs, amended bank covenants and begun negotiating to defe $120 million in union pension fund payments using real estates as collateral.
With slumpingv freight volumes, the company accelerated the integrationof subsidiaries, creatinv excess property and layoffs. In the second YRC expects to doabouft $200 million in sale-leasebacks, Chairman and CEO Bill Zollars said in a recent The company plans at least $100 million in excess property sales this year, he said. Analyst Lee Klaskowa of , who doesn’t own YRC shares, predictecd earnings of 2 cents a shared for allof 2010. Silverr estimated a return to profitability by the seconxd quarterof 2010.
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