NEW YORK, March 25, 2019 /PRNewswire/ -- iStar (NYSE:
STAR) announced that it has entered into a definitive agreement to
sell its portfolio of seven cold storage properties leased to
Preferred Freezer Services, LLC to a third party for a price of
$442.5 million, including the
assumption of $228 million of debt by
the purchaser. The Company currently expects to record a gain of
approximately $215 million in its
financial statements in the quarter in which the sale closes. The
transaction is expected to close in the second quarter of 2019,
subject to the satisfaction of customary closing conditions and
lender consent. There can be no assurance that the closing of the
transaction will happen in the expected timeframe or at all. iStar
intends to use the net sale proceeds for new investments and
working capital.
iStar funded the construction of the cold storage properties
beginning in 2007, in partnership with Preferred Freezer and its
Chief Executive Officer, John
Galiher. This partnership fueled the growth of Preferred
Freezer, from 14 freezers in 2007 to a company currently operating
39 freezers around the country.
"With the recently announced sale of Preferred Freezer, we were
presented with an opportunity to realize the sizable value that had
built up in our seven asset master lease," said Jay Sugarman, iStar Chairman and Chief Executive
Officer. "We were early believers in the model John and his team
were building, and are very happy our strong relationship has now
resulted in significant success for all involved."
"John Galiher stands out as a
leader in the industry for his vision of modernizing port-centric
cold storage and his superior track record of execution," said
Barclay Jones, iStar Executive Vice
President.
"The Preferred Freezer transaction exemplifies iStar's belief
that net lease investing must equally consider real estate
fundamentals and tenant credit. Pricing each of these elements
independently, along with partnering with businesses in sectors we
view to have significant tailwinds, allows us to find attractive
risk-adjusted return opportunities," said Marcos Alvarado, iStar President and Chief
Investment Officer. "We believe there is significant untapped
potential in the net lease market, especially in combination with
Safehold's capabilities."
Pro forma for the sale, iStar's net lease portfolio stands at
$1.7 billion, totaling 15.5
million square feet with a weighted average lease term in excess of
15 years. iStar's net lease investment mandate focuses on single
tenant properties throughout the U.S. across all asset classes,
with deal sizes ranging from $20
million to $400 million.
iStar (NYSE: STAR) is focused on reinventing the ground lease
sector, unlocking value for real estate owners throughout the
country by providing modern, more efficient ground leases on all
types of properties. As the founder, investment manager and largest
shareholder of Safehold Inc. (NYSE: SAFE), the first publicly
traded company to focus on modern ground leases, iStar is helping
create a logical new approach to the way real estate is owned, and
continues to use its historic strengths in finance and net lease to
expand this unique platform. Recognized as a consistent innovator
in the real estate markets, iStar specializes in identifying and
scaling newly discovered opportunities and has completed more than
$40 billion of transactions over the
past two decades. Additional information on iStar is available on
its website at www.istar.com.
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SOURCE iStar