All eight properties, which comprise roughly 3.5 million sf, will be leased back to Paris-based discounter Carrefour under nine-year net leases. The assets have average floor-to-ceiling heights of 32 ft or more and are located in Paris, Lille, Caen, Nancy, Le Mans, Agen, Bourges and Lyon.
The warehouses were purchased on behalf of Corporate Property Associates 14 Inc., a member of W.P. Carey's $3-billion group of publicly held non-traded REITs. CPA 14's holdings in France include 16 properties net-leased to eight tenants in 12 cities. Overall, the fund has 127 properties in 27 states and four countries.
"This sale-leaseback transaction will free up $91 million for Carrefour to fund corporate initiatives that focus on the company's core business," says Anthony S. Mohl, senior director at W. P. Carey. "The tightening of today's global credit markets is making a sale-leaseback the preferred choice of financing for companies seeking to grow and expand their business."
Founded in 1963, Carrefour is among the largest retailers in France. The company originated the hypermarket--a combination of a department store and supermarket that sells food, clothing, electronics, and household appliances, among other items, at discounted prices. Carrefour currently operates approximately 89 hypermarket stores throughout France. The company has other interests such as automobile services, fuel distribution, a credit card business, insurance underwriting and travel agencies.
"After considering a number of financing options we determined that a sale-leaseback transaction was the perfect solution," says Carrefour chief legal officer Norbert Pineau. "It provides for Carrefour's continued growth and enables us to maintain operating control over our warehouses and distribution facilities.
CPAƒn14 invests in single-tenant commercial properties that are typically purchased under a long-term, triple-net lease in which the tenant is responsible for maintaining the premises, insuring the buildings and paying real estate taxes.
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