NEW YORK, NY – April 22, 1998 – W. P. Carey & Co. LLC, a New York real estate investment banking firm, announced the purchase of a to-be-built office facility in the Culver City area of Los Angeles on behalf of Carey Institutional Properties (CIP®) for approximately $27.2 million. The facility, which will serve as the new west coast, international headquarters of TBWA/Chiat Day, will be leased to the Omnicom Group, Inc. (NYSE:OMC) for an initial term of 20 years. In conjunction with the transaction, W. P. Carey restructured an existing lease on the landmark, Frank Gehry designed TBWA/Chiat Day international headquarters building which was purchased by Carey Institutional Properties as part of an earlier sale-leaseback transaction.
The planned 120,000 square foot facility is being converted from an existing warehouse and will include an additional 165,000 square feet of space for future expansion. The facility is located in close proximity to the 1,000 acre planned Playa Vista mixed use development. Construction commenced in March 1998 and is expected to be completed by October 1998.
Commenting on the investment, Wm. Polk Carey, Chairman of W. P. Carey & Co., noted, "The Omnicom transaction is our second major transaction with the company, our first being the existing TBWA/Chiat Day facility which we purchased in 1994. We are pleased to be able to build on what has already proved to be a mutually rewarding relationship."
Barclay G. Jones III, President of Carey Institutional Properties and Vice Chairman of W. P. Carey, noted, "Our in-depth experience in build-to-suit transactions combined with our corporate financing capabilities enabled us to structure the acquisition of the new west coast headquarters building and simultaneously restructure the sale leaseback financing on the original TBWA/Chiat Day headquarters building. Our ability to provide immediate, single source financing for developers and corporate tenants while insulating our investors from the risks traditionally associated with construction financing is a tremendous asset when dealing with complex transactions such as financing of the Omnicom TBWA/Chiat Day deal. Having the flexibility to address the expansion needs of growing companies like Omnicom we are able to help them meet their evolving requirements on a cost effective basis. At the same time we are able to generate attractive acquisition opportunities that meet our own investment criteria."
Omnicom is a multi-national, multi-billion dollar advertising agency conglomerate which plans, creates, produces and places advertising in media channels such as television, radio, newspapers, and magazines. For the year ended December 31, 1997 the company reported worldwide revenues in excess of $3 billion and earnings of approximately $222 million. W. F. Realty LLC advised Omnicom on the transaction.
Founded in 1973, W. P. Carey & Co. specializes in corporate real estate financing through sale-leaseback or net lease and other long term lease financing structures. The firm, and its affiliates, is one of the largest lessors of net leased corporate real estate in the nation. Carey has sponsored the Corporate Properties Associates (CPA®) series of public real estate partnerships and real estate investment trusts (REITs) which, together with Carey Institutional Properties, collectively own over 30 million square feet of property located in 41 states with an aggregate value of approximately $2 billion dollars. The firm recently consolidated the interests of investors in its initial nine investment partnerships, CPA®:1-9, into Carey Diversified LLC, a publicly traded Limited Liability Company listed on the New York Stock Exchange (NYSE:CDC), the nation's largest publicly traded limited liability company.
This press release contains forward-looking statements within the meaning of the Federal securities laws. A number of factors could cause the company's actual results, performance or achievement to differ materially from those anticipated. Among those risks, trends and uncertainties are the general economic climate; the supply of and demand for office and industrial properties; interest rate levels; the availability of financing; and other risks associated with the acquisition and ownership of properties, including risks that the tenants will not pay rent, or that costs may be greater than anticipated. For further information on factors that could impact the company, reference is made to the company's filings with the Securities and Exchange Commission.
