NEW YORK, NY – March 13, 2002 – W. P. Carey & Co. LLC (NYSE: WPC), a leading real estate investment banking firm, announced today that it has acquired and leased-backed four facilities from Minneapolis-based PW Eagle, Inc. (NASDAQ: PWEI) for approximately $13.7 million. PW Eagle is the second largest manufacturer and distributor of polyvinyl chloride (PVC) pipe and fittings and polyethylene (PE) pipe and tubing products in the U.S. PW Eagle is controlled by principles of Spell Capital Partners, LLC, a private equity and buyout firm based in Minneapolis, Minnesota.
The four properties, which total 245,600 square feet of space, will be leased under a 20-year bond-type net lease. They include: a 91,000 square foot manufacturing facility in Tacoma, WA; a 64,000 square foot manufacturing facility in West Jordan, UT; a 67,000 square foot manufacturing facility in Perris, CA; and a 23,000 square foot office building in Eugene, OR. 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 publicly-held non-traded real estate investment trusts (REITs).
"This transaction will provide PW Eagle with more than $13 million in financing to fund key corporate initiatives," said Edward V. LaPuma, Executive Director at W. P. Carey. "In today's tightening credit markets, private equity firms, like Spell Capital Partners, are realizing how a sale-leaseback can benefit their portfolio companies by raising capital from an otherwise depreciating asset. Over the past 12 months more than half of our acquisitions have been with private equity firms. We expect this trend to continue in 2002 as more private equity and buyout firms realize the ease of sale-leaseback financing, which effectively converts the bricks and mortar of their portfolio companies into cash."
"We considered a number of financing options, but the sale- lease back approach provided by an industry leader like W. P. Carey makes inherently more sense from a business and economic standpoint to PW Eagle," said William H. Spell, Chief Executive Officer of PW Eagle.
PW Eagle's products are used in potable water and sewage transmission, turf and agricultural irrigation, commercial and industrial plumbing, natural gas transmission, water wells, fiber optic lines and the electronic and telecommunications industries. The company's products are primarily distributed west of the Ohio and Mississippi Rivers, including Hawaii, Alaska and selected foreign countries.
Spell Capital Partners, LLC acquires controlling interests in well-managed, historically profitable manufacturing, distribution or service businesses often headquartered in the upper-Midwest. CPA®:14 invests in single-tenant commercial properties which 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 December 31, 2001, CPA®:14's diversified portfolio consisted of 111 properties net-leased to 54 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.
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.
