Capital Automotive REIT Announces $97.6 Million in Acquisitions; Adds 28 Properties Representing 45 Franchises in 8 States
MCLEAN, Va., July 30 /PRNewswire/ -- Capital Automotive REIT (Nasdaq: CARS) today announced the signing of definitive agreements or closings for $97.6 million of the previously announced $125 million of letters of intent. Consideration for the acquisitions is substantially all cash. The acquisitions include 28 dealership properties in 8 states, representing 45 franchises, and totaling 132 acres and 765,000 building square feet. The average initial lease term for these acquisitions is 15 years, with multiple five and 10-year optional extensions. Five of the transactions, totaling $35.1 million, closed in June and July 1998. Of the previously announced $125 million of acquisitions under letters of intent, approximately $24 million were rejected by the Company because the dealerships did not meet the Company's cash flow coverage requirements.
Significant transactions include the following:
-- Agreements to acquire five properties from the Gunn Automotive Group
totaling 31.0 acres, located in San Antonio, Texas, for approximately
22.4 million. These properties are tenanted by 6 franchises,
representing 6 automotive brands, including Chevrolet, Dodge and
Nissan. The Gunn Automotive Group was founded by Curtis C. Gunn, Jr.
in 1955. Mr. Gunn remains active in the business he started 43 years.
The Gunn Automotive Group was the 75th largest automotive retailing
group in the country in 1997, with over 16,000 vehicle unit sales and
300 million in revenues.
-- Agreements to acquire three properties from the Gurley-Leep Automotive
Group, based in South Bend, Indiana, totaling 29.4 acres, for
approximately $22.0 million. These properties are occupied by
12 franchises including, Mercedes-Benz, Porsche, Audi, Honda, GMC
Truck, Chrysler, VW, and Cadillac. The Gurley-Leep Automotive Group
currently owns 15 franchised dealerships in Indiana under the direction
of Mike Leep and Van Gurley, who formed the company in 1973. The
dealerships are recipients of Chrysler's "Five Star" Award, Buick's
"Buick Best in Class" Award and GMC's "Award for Dealership
Operations".
-- Agreements to acquire four properties from Warren Henry Automobiles,
totaling 9.8 acres in Miami, Florida, for approximately $12.6 million.
These properties represent 4 brands, including, Infiniti, Jaguar, Volvo
and Land Rover. Warren Henry Automotive was founded in 1976 by
Warren H. Zinn, who continues to oversee the group's operations.
-- The closing of the acquisition of three properties from Behlmann
Automotive, totaling 23.9 acres in St. Louis, Missouri, for
approximately $12.2 million. Behlmann Automotive operates 2
franchises, Pontiac and GMC. In 1996, Behlmann Pontiac-GMC was the
largest single point Pontiac-GMC dealership in the United States.
Behlmann Automotive was founded in 1972 by Ken and Paul Behlmann, who
continue to oversee the Group's operations. This transaction closed in
June 1998.
-- The closing of the acquisition of two properties, Airport Marina Ford
and Airport Marina Saturn, from Russell E. Hand, totaling 6.0 acres in
Los Angeles, California, for approximately $10.6 million. Mr. Hand has
operated new car dealerships since 1977 and currently operates or
maintains an interest in three franchises, including Ford and Saturn.
Additionally, Mr. Hand holds the Saturn Market Area in Los Angeles for
the region including the Westside and South Bay area from Santa Monica
to Long Beach. This transaction closed in July 1998.
-- The closing of the acquisition of five properties from Town and Country
Automotive, totaling 11.6 acres in Middletown, Connecticut, for
approximately $7.6 million. Town and Country Automotive currently
operates 5 dealerships, representing 12 franchises, including,
Chrysler-Plymouth, Lincoln-Mercury, Cadillac and Mazda. Town and
Country Automotive is currently led by its founder, Michael Augeri, who
has 41 years of experience in the automotive retailing industry. This
transaction closed in June 1998.
-- Agreements to acquire four properties from Orr Automotive totaling
9.6 acres, located in Texarkana, Texas and Shreveport, Louisiana, for
approximately $5.5 million. These properties include 5 franchises,
including, BMW, Acura, Infiniti, Honda and Mitsubishi. Orr Automotive,
a third generation dealership group, was founded in 1926 by Gus Orr and
is currently led by Gregg and Keith Orr.
Thomas D. Eckert, president and chief executive officer of Capital Automotive, stated, "These acquisitions are consistent with our vision of continuously moving forward to further advance Capital Automotive as the leading REIT in the automotive industry. We are pleased to add these high quality dealership properties to our growing portfolio as they reflect the deliberate focus we have taken to maximize profitability and return value to shareholders through the acquisition of strong dealer groups with outstanding properties in the right markets. Further, this group of acquisitions strengthens our portfolio by continuing the trend of lengthening our initial lease terms and creating additional geographic and franchise diversification."
Upon completion of these acquisitions, Capital Automotive will own 89 properties, an increase of 147% from the original 36 properties acquired in conjunction with the Company's initial public offering in February 1998. These acquisitions will expand Capital Automotive's presence into 17 states, totaling 133 franchises and representing 34 brands. In addition, these acquisitions will increase the Company's real estate portfolio to 477 acres and 3.1 million square feet of dealership buildings. |
