NEW YORK, NY - July 18, 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 two facilities from Special Devices Incorporated (SDI), a leading designer and manufacturer of engineered pyrotechnic devices used in vehicle airbag and other automotive safety systems, for approximately $37.7 million. Under the terms of the sale-leaseback transaction, the facilities, which are located in Moorpark, California and Mesa, Arizona, will be leased to SDI under a 20-year bond-type net lease with two additional ten-year options.
The facilities were purchased on behalf of Corporate Property Associates 12 Incorporated (CPA®:12) and Corporate Property Associates 14 Incorporated (CPA®:14), both public, non-traded real estate investment trusts (REITs) that invest in single-tenant commercial properties. CPA®:12 and CPA®:14, which are members of the $3 billion W. P. Carey Group, will each have an equal interest in the transaction. As of March 31, 2001, CPA®:12 had total assets of $430 million while CPA®:14 had total assets of $707 million.
Edward V. LaPuma, Executive Director of W. P. Carey, said, "The SDI transaction is another example of W. P. Carey's proven experience in working with private equity firms, such as J.F. Lehman, to provide creative real estate financing solutions that meet the needs of their portfolio companies. The sale-leaseback transaction is a significant component of SDI's recapitalization plan and will enable it to focus on growing its core business."
The facilities consist of a total of approximately 250,000 square feet of office, manufacturing and distribution space. The 170,000 square foot Moorpark, California facility consists of office and manufacturing space situated on a 209-acre site located 50 miles southwest of Los Angeles in the San Fernando Valley/Ventura County Industrial Market. The 80,000 square foot Mesa, Arizona facility consists of office and manufacturing space situated on a 24-acre site located 20 miles east of downtown Phoenix in Maricopa County.
SDI's primary products are initiators, which function like an electrical match to ignite and initiate the chain reaction that inflates an automotive airbag. A leader in a growing world market, SDI maintains an estimated 30% to 35% share of the total market. SDI's major customers include many of the world's largest airbag manufacturers, including TRW, Autoliv, and ARC, which in turn sell airbags to major auto manufacturers. SDI is majority owned by J.F. Lehman, a New York-based investment firm specializing in private equity investments in middle-market companies.
As of March 31, 2001, CPA®:12 had a diversified portfolio that included 91 properties net-leased to 39 tenants throughout the United States and CPA®:14 had a diversified portfolio that included 66 properties net-leased to 44 tenants throughout the United States. These properties are subject to long-term, triple-net leases in which the tenants bear responsibility for maintaining the premises, insuring the buildings and paying real estate taxes. W. P. Carey & Co. LLC and its affiliates CPA®:12 and CPA®:14, target middle-market tenants and private companies with an eye towards providing creative financing solutions to meet their corporate real estate needs. W. P. Carey has found that when a company removes real estate from its balance sheet the company is then able to re-deploy this much-needed capital to pay down debt, or finance other corporate initiatives.
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 leading lessors of net leased corporate real estate. W. P. Carey & Co. LLC (NYSE:WPC), the largest publicly traded limited liability company in the world, owns and manages more than 45 million square feet of property in the United States and Europe. The firm is headquartered in Manhattan and has offices in London and Paris. Additional information on W. P. Carey can be found on the firm's website: 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.