Equity Capital Management (ECM), a commercial real estate company focused exclusively on the net lease and sale leaseback sector, announced today that it has signed definitive agreements to sell up to $625 million of single tenant office, industrial, and retail properties under long term net lease agreements.
The properties being sold include assets owned by ECM Diversified Income & Growth Fund and ECM Income & Growth Fund III, two investment vehicles sponsored by ECM. Each of the funds was focused on acquiring institutional quality, net leased, office, industrial, and retail properties, primarily leased to investment grade tenants. The substantial majority of the office and industrial properties being sold are corporate or regional headquarters and significant regional or critical hub distribution facilities. It is anticipated that the properties will close during the first half of 2011. The majority of revenue from the assets being liquidated come from investment grade credits or significant subsidiaries of investment grade credits.
ECM, headquartered in Chicago, was founded by Shelby E. L. Pruett and James G. Koman with the intention of establishing itself as the leading owner, operator and manager of institutional quality, net lease real estate. Commenting on this transaction, Shelby E. L. Pruett, Co-Founder and Managing Partner stated, "ECM's primary investment objective has been to provide its investors with attractive risk adjusted returns and predictable current income through multiple time periods and economic cycles. We are pleased to have met those objectives.
"ECM has followed the same proven strategy since inception, with the same senior management team, which has invested principally on behalf of institutions for the last decade. The corporate real estate market is a large, fragmented, and growing market; corporations and build to suit developers have reduced access to capital; and the investment grade net lease sector is under-represented in the public and private markets, all of which we believe will create significant opportunities in the future."
James G. Koman, Co-Founder and Managing Partner added, "The assets being sold are representative of the type of properties we are looking for moving forward. As has been the case historically, the majority of these assets were acquired through off-market transactions as a result of our deep relationships with developers, corporations, and other institutional investors. There is a limited universe of public and private companies focused on this sector which creates a pricing advantage for companies like ECM.
Joe Yiu, Chief Investment Officer added, "With long term leases backed primarily by investment grade tenants, net lease assets like ECM's have the ability to provide investors a solid foundation of predictable, contractual cash flows and the potential for capital appreciation. When we acquired these properties, we made our investment decision based on multiple exit strategies and long term fundamentals rather than short term market conditions."
About the Company
Based in Chicago, with offices and affiliates in New York, St. Louis, and Bern (Switzerland), Equity Capital Management is a self-administered real estate company focused on investing in institutional quality, single-tenant office, industrial, and retail properties that are net leased to investment grade and other high credit quality tenants on a long-term basis. The Company and its senior team have successfully operated institutional funds through multiple time periods and economic cycles and have invested in or financed more than $2 billion in net lease properties. ECM's investment activities are focused on properties that are operationally significant to the tenant's business and are typically the result of a direct build to suit or sale leaseback transaction. The Company is an active buyer of commercial properties nationwide. For more information please see our web site at www.ecm-funds.com or contact (312) 827-2280.
About the Net Lease Industry
Total returns for the broader net lease sector, as measured by select broad based public net lease REITs, have outpaced total returns for the MSCI REIT Index, as well as select broad based public office and industrial REITs, over the 1-,2-,3-,5- and 10-year periods ending in 2010,by as much as 200%. This performance is based on the following net lease companies listed by ticker symbol (NNN, O, EPR, LXP, LSE); the following office companies listed by ticker symbol (BXP, BDN, BPO, OFC, DEI, DRE, HIW, CWH, KRC, CLI, MPG, PKY, PDM, PSB, SLG, TPGI); and the following industrial companies listed by ticker symbol (AMB, DCT, EGP, FR, FPO, LRY, PLD).
Contacts:
The Hauser Group
Julie Hauser, (314) 629-3887