NEW YORK, NY – December 19, 2001 – W. P. Carey & Co. LLC (NYSE: WPC), a leading real estate investment banking firm and lessor of net leased corporate properties, announced today that it has acquired and leased-back 12 retail stores and a key distribution facility for the Western United States from PETsMART, Inc. (NASDAQ: PETM), the largest pet products retailer in the nation, for approximately $71 million.
Under the terms of the sale-leaseback agreement, the facilities will be leased to PETsMART under 20 year net leases. The properties consist of 12 retail stores, each approximately 26,000 square feet in size, totaling approximately 274,000 square feet. The stores are located in: Westlake Village, CA; Evanston, IL; Lake Mary, Boca Raton, Tallahassee and Sawgrass, FL; Oxon Hill, MD; Braintree, MA; Flint, MI; Fridley, MN; and Southlake and Dallas, TX. The transaction also covers PETsMART's 620,000 square foot Phoenix, AZ distribution facility, which includes a newly constructed forward distribution center.
The facilities were purchased on behalf of Corporate Property Associates 14 Incorporated (CPA®:14), a member of the $3.5 billion W. P. Carey Group of non-traded real estate investment trusts (REITs). In addition, a portion of this transaction has been specified for CPA®:15, W. P. Carey's newest diversified net lease REIT. After CPA®:15 raises the minimum $10 million, the fund will own up to a 30% interest in the properties. Gordon F. DuGan, President and Chief Acquisitions Officer of W. P. Carey, said, "Increasingly in today's tightening credit market, companies are realizing the benefits of sale- leasebacks. This deal allows PETsMART to monetize its real estate and use the $71 million from the sale-leaseback transaction to fund other corporate initiatives that will greatly benefit their shareholders."
"PETsMART is pleased to have W. P. Carey as the landlord on these properties." said Scott Crozier, Senior Vice President of PETsMART. "For many years, PETsMART has been placing its self-developed real estate in financing arrangements known as tax retention operating leases. As the five-year terms on these financing mechanisms expire, we routinely place the properties with long-term investors such as W. P. Carey. This is our first sale of such properties to W. P. Carey and we look forward to a long relationship and the opportunity to work with them again as more of these properties become available for sale to the public."
CPA®:14 and CPA®:15 are both non-traded REITs that invest in single-tenant commercial properties. These properties are typically purchased under a long-term, triple-net lease, in which the tenant is responsible for maintaining the premises, insuring the buildings and paying real estate taxes. As of Sept 30, 2001, CPA®:14's diversified portfolio consisted of 87 properties net-leased to 50 tenants throughout the United States and Europe.
Founded in 1973, W. P. Carey & Co. specializes in corporate real estate financing through the corporate net lease, or sale-leaseback structure. The firm and its affiliates continue to be the leading lessors of net leased corporate real estate in the United States. As the largest publicly traded limited liability company in the world, the company owns and/or manages more than 400 commercial and industrial properties throughout the United States and Europe comprising of more than 50 million-square-feet of space. The firm is headquartered in Manhattan and has offices in London and Paris.
PETsMART, Inc., (NASDAQ: PETM) is the largest specialty retailer of services and solutions for the lifetime needs of pets. The Company operates more than 560 pet stores in the U.S. and Canada as well as a large pet supply catalog business, and is the major, controlling investor in the Internet's leading online provider of pet products and information (www.petsmart.com). PETsMART provides a broad range of competitively priced pet food and supplies, and offers complete pet training, grooming and adoption services. Since 1994, PETsMART Charities has donated more than $20 million to animal welfare programs and, through its in-store adoption programs, has saved the lives of more than a million pets.
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.
