EAGAN, MN-Blue Cross Blue Shield of Minnesota has sold eight office properties in the state, including its headquarters here, to an affiliate of New York City-based WP Carey & Co. LLC in a sale-leaseback transaction. The health care insurance firm, with about 3,700 employees, wanted to gain liquidity to fund strategic initiatives.
The company put the properties on the market in November. The sites in Eagan include the 442,542-square-foot corporate headquarters, the 227,666-square-foot Yankee Place, the 347,000-square-foot River Park I and II buildings, the 29,916-square-foot Blue Cross University and the 12,286-square-foot company’s child development center. The deal also includes a 62,973-square-foot call center in Virginia, MN and a 10,263-square-foot building in Aurora, MN.
Pamela Sedmak, CFO for the insurer, said in a statement that the buyer provided an attractive payoff, allowing the firm to advance its business plan. “A long term sale-leaseback was the logical financing option for redeploying the illiquid capital tied up in our real estate holdings to fund strategic initiatives that enable us to improve the health and wellness of our members,” he said.
Gino Sabatini, managing director with WP Carey, tells GlobeSt.com that Blue Cross agreed to a 15-year lease in the deal. He would not comment on the purchase price. “This property is very important to them,” he says. “We’re highly confident that they’ll stay here for the full lease term.”
Not every company has this option, but Blue Cross, with a reported revenue of $2.8 billion in 2010, is a high-credit tenant that any owner would be glad to have as a tenant, Sabatini says. “We’re seeing a lot of opportunity in the investment-grade properties today,” he says. The purchase was made through WP Carey’s publicly held, non-traded REIT affiliate CPA:17-Global.
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