Commercial Property News - October 2008 - (Page 32)

C O R P O R AT E USERS & SERVICE FIRMS REport the amount of capital available. duplicate sites to be put up for sale. In fact,sale-leasebacks are all the “It could be an attractive time to more attractive because the credit acquire a company,” said Jim Wilson, crunch has made capital from global director of corporate servicother sources harder to come by es client accounts for CB Richard for corporations,Yeskey said.“They Ellis Inc. can access capital at a cheaper UNLOCKED CAPITAL rate than through unsecured (2007 global corporate dispositions) lending and at better terms and Total Dispositions $88 Billion conditions.” As a result, while corporate Global Sale-Leasebacks $56 Billion real estate dispositions totaled U.S. Sale-Leasebacks $13.5 Billion 10 percent of global transaction Source: Jones Lang LaSalle Inc. volume in 2007—two-thirds of that in the form of sale-leasebacks, Those companies seeking to according to Jones Lang LaSalle transact sale-leasebacks will find a (see “Unlocked Capital,” above)— number of types of interested they could increase to more than investors representing a significant 20 percent of total volume this amount of equity capital. REITs, year, Rudy predicted. institutional funds and other net And falling stock prices could lease buyers are all looking for salefurther fuel deal flow of all types, as leaseback opportunities, according some companies may become rela- to Wilson. tive acquisition bargains, leading And while a material gulf exists between what buyers are offering and what sellers are accepting, cap rates have risen, making sale-leasebacks relatively attractive to sellers by historical standards, he said. At the same time, tighter credit markets have meant some changes in sale-leaseback structures. Due to tighter debt markets, for instance, lenders are increasingly looking for longer lease terms. “Where the 10-year deal was commonplace, buyers are now looking for 12-year to 15-year lease terms,”Wilson said.“The buyer can secure lower-cost debt. Lease terms are being pushed out further.” Rudy has also noticed a flight to safety. In recent years, investors had become more accepting of sale-leaseback structures and were willing to acquire a building or buildings with some Financial Keys Corporations Unlock Capital with Sale-Leasebacks Despite Limitations By Eugene Gilligan uring the past several years, real estate transactions have represented a means for corporations to unlock capital for purposes tied more directly to their business. With financing capital in short supply these days, however, corporations seeking to execute sale-leasebacks may receive less money than in recent years. “We have seen values back up,” affirmed Deloitte & Touche L.L.P. real estate capital markets national director Dennis Yeskey. But there may still be reasons to transact sale-leasebacks, noted Jones Lang LaSalle Inc. international director Kenneth Rudy. Obtaining capital to re-pay debt, to invest in core operations or research and development or to buy or merge with another company may be more important than waiting to maximize D Q&A Blue for Business American Express Finds Multiple Benefits in New Workplace Solution By Adam Perrotta CPN news editor Adam Perrotta spoke with American Express Co. director of global business strategy Robyn Kaiser about BlueWork, the firm’s workplace-solution program, which enables business growth without necessitating the addition of incremental real estate and attracts employees through flexibility in the workplace. change with it by creating a more flexible workspace to attract and retain the next generation of employees. In response, in 2004, we formed a small, crossfunctional team, including members of the human resources and technologies teams, to identify best practices and evolve our strategy. Over the following two years, the BlueWork program, as it is defined today, went through a variety of stages and definitions. CPN: What is the main goal of the program and what are some of the specific methods involved? Kaiser:There are two main aspects of BlueWork. The first is “growth without growth,” which is essentially assisting the business to grow without increasing its real estate footprint while reducing its costs. The second goal is the attraction and retention of the best talent.The intent is to provide the business with a set of customized solutions to meet their specific needs; it is not one size fits all. We work closely with colleagues in human resources who are developing our flexible working policies, and this allows us to provide more holistic,strategic solutions.BlueWork is not an initiative; it is a shift in our approach to serving the business. CPN: Has BlueWork been implemented firmwide or CPN: When did the BlueWork program begin, and what was the driving force behind it? Kaiser: Our global real estate team is challenged to bring value to the company through longer-term, forward-thinking strategies for the workplace. BlueWork came on the heels of many years of breaking from the traditional workplace and 32 implementing more modern, open environments, as well as managing through a variety of factors during the years 2000 to 2002, including 9/11 and economic downturns. The aim was to more effectively utilize our existing footprint to keep our costs down and maintain scalability to meet business demands and fluctuations. Also, our workforce was changing and we needed to COMMERCIAL PROPERTY NEWS • October 2008 • www.cpnonline.com http://www.cpnonline.com

Table of Contents for the Digital Edition of Commercial Property News - October 2008

CPN - October 2008
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Corporate Report

Commercial Property News - October 2008