Glenborough Announces Fourth Quarter Gains on Dispositions and Charges
January 05 2006 - 5:00PM
Business Wire
Glenborough Realty Trust (NYSE:GLB)(NYSE:GLB PrA) reported the
following results of the final stages of its portfolio
repositioning: In the fourth quarter 2005, the Company sold seven
properties for total consideration of $115.4 million and expects to
recognize gains on sale of approximately $31.9 million. The Company
also has four property sales pending at December 31, 2005. These
four property sales total $57 million in consideration and are
expected to result in a gain on sale of approximately $7.3 million
in the first quarter 2006. The Company is in the process of
recapitalizing and reducing its interest in one of its land and
development joint ventures. This transaction is expected to be
completed in the first quarter of 2006 and is expected to result in
a net realizable value charge in the fourth quarter 2005 of
approximately $31.7 million. These transactions substantially
complete the Company's previously announced portfolio realignment
out of the mid-west and focus the remaining properties in the
Company's core markets of Washington DC, Southern California,
Northern New Jersey, Boston and Northern California. Combined the
Washington DC and Southern California markets comprise 50% of the
Company's property portfolio. CLOSED TRANSACTIONS - FOURTH QUARTER
2005 In the fourth quarter, the Company sold seven properties for a
total consideration of $115.4 million and expects to recognize
gains on sale of approximately $31.9 million. The Company has now
exited the Chicago, Minneapolis and St. Louis markets. -0- *T
Property Market, State Size (SF) Oakbrook Terrace Chicago, IL
232,000 Navistar Chicago, IL 474,400 Embassy Plaza Chicago, IL
136,700 Northglenn Denver, CO 65,000 Riverview Minneapolis, MN
227,100 Woodlands Plaza St. Louis, MO 81,500 Palms IV and North Las
Vegas, NV 129,500 *T PENDING TRANSACTIONS The following four
properties are expected to close within the first quarter: -0- *T
Property Market, State Size (SF) Thousand Oaks Memphis, TN 422,300
Capitol Center Des Moines, IA 165,127 Osram Indianapolis, IN 45,265
Vreeland Florham Park, NJ 133,090 *T The total sale price for these
four properties is $57 million and the Company expects to recognize
a gain on sale of approximately $7.3 million in the first quarter
2006. The Company is also in the process of recapitalizing and
reducing its interest in one of its land and development joint
ventures. The recapitalization will result in a net realizable
value charge of approximately $31.7 million in the fourth quarter.
If completed, the proceeds will be available to invest in the
Company's core business, reduce debt and/or repurchase stock. The
Company expects to recognize a net realizable value reserve of
approximately $2.3 million on a note receivable which was partial
consideration for a property sold in 2004. The consideration for
all property sales in 2005 was comprised of cash and the assumption
of existing financing by the buyers. CONFERENCE CALL Glenborough
will host a conference call to discuss these matters along with the
results of the fourth quarter and full year 2005 on Tuesday,
February 7th, 2006 at 1:30 p.m. Eastern Time (10:30 a.m. Pacific
Time). Interested parties can listen to the call by calling
1-800-967-7184, confirmation number 9570645 preferably 5-10 minutes
before the scheduled time. In addition, a replay of the call will
be available until Friday, February 10th 2006 at 5:00 p.m. Pacific
Time at 1-888-203-1112, confirmation number 9570645. Glenborough is
a REIT which is focused on owning high quality, multi-tenant office
properties concentrated in Washington D.C., Southern California,
Northern New Jersey, Boston and Northern California. The Company
has a portfolio of 48 properties encompassing approximately 8.7
million square feet as of December 31, 2005. FORWARD LOOKING
STATEMENTS: Certain statements in this press release are
forward-looking statements within the meaning of federal securities
laws, including without limitation statements concerning plans,
objectives, goals, strategies, expectations, intentions,
projections, developments, future events, performance or products,
underlying assumptions, and other statements which are other than
statements of historical facts. In some cases, you can identify
forward-looking statements by terminology such as "may," "will,"
"should," "expects," "intends," "plans," "anticipates,"
"contemplates," "believes," "estimates," "predicts," "projects,"
"potential," "continue," and other similar terminology or the
negative of these terms. Because these forward looking statements
involve risk and uncertainty, there are important factors that
could cause our actual results to differ materially from those
stated or implied in the forward-looking statements. Those
important factors include: -- Purchaser default risk relative to
the pending transactions referenced above. -- Casualty and/or
condemnation risk relative to the pending transactions referenced
above. -- Our inability to locate suitable buyers for our listed
assets who are ready, willing and able to close transactions at the
sales price we anticipate; -- Increased costs of financing cause a
reduction in demand for commercial properties and therefore a
reduction in the market value of the assets listed for sale; --
Lower than expected retention of existing tenants negatively
affects the value of the assets listed for sale, and/or tenant
disputes or defaults negative affect the closing of the pending
transactions. -- Changes in market rental rates for office space
negatively affect the value of the assets listed for sale; --
Changes in market conditions render the repurchase of our stock
imprudent; -- Our inability to locate and acquire suitable property
at reasonable prices in our core markets; -- The failure of the
economy to continue its expansion; -- The effect of any future
impairment charges associated with asset disposition or market
conditions. Given these uncertainties, readers are cautioned not to
place undue reliance on such statements. All forward-looking
statements are based on information available to us on the date
hereof and we assume no obligation to update or supplement any
forward looking-statement. Additional information concerning
factors that could cause results to differ can be found in our
filings with the SEC including our report on Form 10-K/A for the
year ended December 31, 2004 and our quarterly reports on Forms
10-Q for the periods ended March 31, 2005, June 30, 2005, and
September 30, 2005.
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