Inland, a Nontraded REIT, Flashes Its Cash
The Wall Street Journal reports: While transactions have slumped in most corners of the real-estate world, the recent sale of a New Jersey office complex for $230 million highlights the unusual position of a suburban Chicago-based company that is still ready and able to buy.
Inland American Real Estate Trust Inc., a so-called nontraded real-estate investment trust sponsored by one of the Oak Brook, Ill.-based Inland Real Estate Group of Cos., last month paid $40 million in cash and assumed a $190 million mortgage to acquire a three-building office complex in Bridgewater, N.J., from SL Green Realty Corp., a New York-based office REIT, and property financing specialists Gramercy Capital Corp. The approximately 670,000-square-foot office property is the North American headquarters of Sanofi-Aventis SA, a France-based pharmaceutical company.
The sale is one of the highest prices paid in the U.S. this year for an office property, according to Real Capital Analytics, a New York-based real-estate-research firm. It also is part of a string of acquisitions valued at a total of about $700 million that Inland American has agreed to or completed so far this year.
Inland American's acquisitions are fueled by more than $7 billion that it has raised since 2005 from investors, largely individuals, who have bought the shares that aren't traded on a public exchange. That inflow has slowed somewhat but has continued even as Inland has faced pressure from some investors seeking to sell back their shares. Inland American raised about $91 million last month, according to Robert A. Stanger & Co., a Shrewsbury, N.J., investment-banking firm that specializes in nontraded REITS.
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Posted by: Matt Stone