Capital Automotive Announces Canadian Joint Venture and Initial Investments
biz.yahoo.com
Thursday June 2, 8:30 am ET
MCLEAN, Va., June 2 /PRNewswire-FirstCall/ -- Capital Automotive REIT (Nasdaq: CARS), today announced that it has formed a joint venture with Kimco Realty Corporation (NYSE: KIM) to acquire automotive retail real estate in Canada. The primary strategy of the joint venture is to purchase real estate to be leased to operators of franchised automotive dealerships under long- term, triple-net leases. In addition, the venture will also provide mortgages, facility improvements, construction financing and takeout commitments in certain circumstances. The investments are to be sourced and managed by Capital Automotive and are subject to review and approval by a joint oversight committee consisting of Capital Automotive and Kimco management personnel. There are an estimated 3,500 franchised automotive dealerships in Canada with a total value of approximately $5 billion (Canadian).
Additionally, the joint venture has closed on its first acquisitions totaling $6.5 million (Canadian). These investments consist of two automotive dealerships located in Toronto, Ontario and are leased to a multi-franchised, multi-location dealer group who has been in the business for approximately 18 years. The dealer group operates two Nissan franchises and an Infinity franchise at these locations.
Thomas D. Eckert, President and CEO of Capital Automotive stated, "We are extremely excited about expanding our business into Canada with our new partner Kimco. Kimco has significant experience having been in the Canadian market since 2001. We believe that by combining our industry knowledge and contacts with their market and structuring capabilities we can create value for Canadian automobile dealers and our shareholders."
Milton Cooper, Kimco's Chairman and CEO stated, "We are proud to be expanding our Canadian portfolio by teaming up with the premier capital provider for automobile dealerships in the U.S. The venture continues and expands our commitment to building our Canadian business." |
