Paris-based Thomson Consumer Electronics (Technicolor, RCA) is one of the world's largest consumer electronics companies. The seller was Bentley Forbes of Century City, CA. The 24-acre development is located at at 10330 N. Meridian St. in the northern Indianapolis submarket of Carmel, Ind. It was designed by architect Michael Graves and completed in 1994.
The sponsor of the transaction was ExchangePoint LLC out of Los Angeles. The company's director of acquisitions Robert Budman tells GlobeSt.com that in order for the value of the asset to increase, the owners will need to renew Thomson's lease, which reportedly has several years remaining. Then again, he says Thomson has been in that market for 50 years and this is only its second headquarters location. "History has shown they stay in their market and their corporate headquarters for long periods," he says.
The deal included a defeasance payment related to a loan on the asset that was paid off by the buyer with a new $50-million loan from CIBC. "The lower interest rates (on the new debt) made the returns more attractive even with the added cost of defeasance (on the old debt)," says Budman.
ExchangePoint president Paul Daneshrad is calling the sale the largest single-tenant office building acquisition by a TIC in the industry's brief but substantial history. "This is a great example of how the TIC industry is maturing and exploding," says Daneshrad. "Before, a transaction of this size and quality could only be completed by institutional-sized investors. Today, the TIC market has the liquidity and strength to compete for the largest and highest quality assets in the country."
The TIC industry is projected to complete $4.2 billion in transactions this year, up from $1.7 billion last year and $756 million in 2003. Omni Brokerage, which represented ExchangePoint as the managing (securities) broker-dealer, tells GlobeSt.com that according to its records the next largest single-tenant TIC deal was the $40-million acquisition of a 210,000-sf building in Oakbrook, IL occupied by Ace Hardware. That deal closed earlier this year.
"I think (these deals) represent the acceptance of the TIC marketplace by everyone involved--lenders, investors and broker-dealers," says Manuel Nogales, Onmi's director of business development.
ExchangePoint is a sister company of StarPoint Properties LLC, a real estate firm specializing in the acquisition and re-positioning of investment real estate. The commercial real estate brokers involved included Jon Jessup of Summit Realty/Cushman & Wakefield on the buy side and Jeff Shell and Anne Galbraith of Cushman & Wakefield on the sell side. Gary Mozer and Lee Norman of George Smith Partners arranged the $50 million of debt financing through Jonathan Greenhouse at Canadian Imperial Bank of Commerce. Defeasance was completed by Commercial Defeasance LLC of Charlotte NC.
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