AMB Buying Majority of Mexico Public Company

SAN FRANCISCO-AMB Property Corp. has agreed to purchase the Peabody Group’s interest in G. Accion S.A. de C.V., one of the largest public real estate companies in Mexico. According to G. Accion’s website, Peabody owns a 41% stake in the company. The purchase price is $44.6 million (US $0.85 per share), according to an after hours announcement by AMB.The interest that AMB intends to purchase exceeds certain thresholds provided in Mexican regulations. To overcome the obstacle, AMB, Kimco Realty Corp. and members of G. Accion’s management team, through their respective affiliates, plan to carry out a tender offer for the remaining public shares and have requested authorization from the Comision Nacional Bancaria y de Valores (CNBV) to do so. AMB expects the tender offer to be completed in the first quarter of 2005. Assuming all shares in the public float are tendered, shares in G. Accion are expected to be held approximately 41% by AMB, 27% by Sr. Escandon, 20% by Kimco and 12% by G. Accion’s management team. If successful, shareholders of the recapitalized company intend to request the cancellation of the registry of the shares of G. Accion from the Mexican Securities Registry and the delisting of G. Accion from the Bolsa Mexicana de Valores, S.A. de C.V., the Mexican stock exchange. Through its contracts and alliances, G. Accion manages one of the largest real estate portfolios in Mexico in part due to pre-existing relationships with AMB and Kimco. The company’s core business is providing management and development services for more than 8 million sf of industrial, office, retail and residential properties in Mexico. The company also owns a 50% interest in Cushman & Wakefield de Mexico GCI, S. de R.L. de C.V. and Central Parking System Mexico S.A. de C.V. AMB began developing industrial real estate with G. Accion in Mexico in the second quarter of 2002. Since then, AMB’s activity in Mexico City and Guadalajara has included approximately 3.7 million sf of acquisitions and developments. AMB owns an additional 199 acres of land in Mexico City that can support in excess of 3 million sf of future distribution facility development.In February, G. Accion agreed to sell the majority of its industrial portfolio to Jones Lang LaSalle and institutional clients of LaSalle Investment Management. The $300-million transaction was believed to be the largest ever completed in Latin America.The acquired portfolio consists of 56 properties located in 11 cities throughout Mexico, totaling over 5.6 million sf of leaseable space, generating over $30 million in net operating income. LaSalle purchased the portfolio on behalf of a consortium of US, European and Canadian institutional investors, including the California Public Employees’ Retirement System (CalPERS), the British Columbia Investment Management Corporation (bcIMC), and funds owned and controlled by the Jones Lang LaSalle group.