NEW YORK, NY – December 15, 2000 – W. P. Carey & Co. LLC (NYSE: WPC), a leader in the ownership and net leasing of corporate properties, announced today that it closed the acquisition of three new megaplex/stadium-seated movie theaters to be operated by RAVE Reviews Cinemas, LLC. The transaction was made on behalf of Corporate Property Associates 14 Incorporated (CPA®:14) and Corporate Property Associates 12 Incorporated (CPA®:12). CPA®:14 and CPA®:12 are publicly held, non-traded real estate investment trusts (REITs) and are members of the $2.5 billion W. P. Carey Group.
CPA®:14 and CPA®:12 will sponsor the construction of three megaplex theaters located in Port St. Lucie, Florida; Pensacola, Florida; and Hickory Creek, Texas, each consisting of approximately 55,000 square feet. The Port St. Lucie, FL facility will consist of a 2,704 seat, 14-plex theater on 13 acres of land, located in a full-service retail, entertainment, residential and recreational development. The Pensacola, FL facility is a 3,116 seat, 16-plex theater on 10 acres of land, easily accessible from both north-south and east-west highways. The Hickory Creek, TX facility will be a 3,085 seat, 16-plex theater on 11 acres of land, located in a growing area north of the Dallas/Forth Worth residential/retail corridor. Each facility will be leased to a wholly-owned subsidiary of RAVE under a 20-year, bond-type net lease and will be guaranteed by RAVE Reviews. CPA®:14 and CPA®:12 have committed approximately $19.5 million to the projects.
RAVE Reviews LLC is a new theater operator whose management team has extensive experience in the movie theater industry. The Company's goal is to capitalize on the current "Rescreening of America," which is characterized by increased primary demand, increased supply of films, and consumer preference shifting away from traditional sloped-floor theaters and toward high quality stadium megaplexes. RAVE plans to develop new megaplex theaters in markets where no other stadium theater competition exists, with a particular focus on small to mid-sized markets in the Southeast and Southwest. As the dominant theater operator in each market, RAVE will have sole access to all of the films released by distributors. Venture capital funding for the Company has been provided by Boston Ventures Management, LP.
Commenting on the transaction, Edward V. LaPuma, Executive Director of W. P. Carey, stated, "W. P. Carey's ability to analyze and understand the value of RAVE's aggressive strategy in the rapidly changing movie theater industry, allowed us to develop a transaction that will enable the Company to capitalize on current industry trends. In conjunction with equity provided by Boston Ventures, the W. P. Carey sale-leaseback transaction will provide long-term financing as well as construction financing for the new megaplex theaters."
W. P. Carey President and Chief Acquisitions Officer Gordon F. DuGan added, "As an investor, we are interested in expanding our portfolio by capitalizing on opportunities in niche industries such as entertainment. Toward that end, we are actively working with venture capital firms like Boston Ventures to design financings that meet the highly specialized needs of their portfolio companies."
Founded in 1973, W. P. Carey & Co. specializes in corporate real estate financing using the corporate net lease, or sale-leaseback structure. The firm and its affiliates is one of the largest lessors of net leased corporate real estate in the nation. W. P. Carey & Co. LLC (NYSE: WPC), the largest publicly traded Limited Liability Company in the world, owns and manages over 42 million square feet of property in the USA and Europe. Additional information about W. P. Carey is available on the company's Web site: www.wpcarey.com
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.