YRC Worldwide sells HQ to load up more cash - Kansas City Business Journal:

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But it didn’t go far. A group of loca investors led by Ken Block andStevde Block, principals of Kansas City real estatse firm , bought the Overlanxd Park headquarters in a sale-leasebaci deal that includes a potential 30-year lease for YRC. The company did not disclose the priceror buyer, and Ken Block said he couldn’t commenr because of a confidentiality agreement, but a YRC Securitiesa and Exchange Commission filingf suggests the purchase price was $22.5 million.
Johnsohn County lists the property’s appraised valuse at close to $25 “The monetization of real estate assets is a part ofYRC Worldwide’s ongoing financial strategy to weathe r the (economic) recession and enhance its liquidity YRC said in a statement e-mailed to the Kansas City Busines Journal . “The YRC Worldwide corporate headquarters is and will continuee to be located in theOverland Park, Kan., location.” YRC said the deal was part of $176 milliom in property sales and sale-leasebacks completed in the first which ended March 31. But according to the , the deal closee May 1.
The lease has an initiall term of10 years, plus two 10-year renewao options, YRC said. The sale included two the company said. Appraiser’s office records list the propert as having a total building areaof 295,000 squaree feet, built in 1972, on 21.5 The transaction appears to be reflecte in YRC’s first-quarter SEC filing as a March 31 offics complex deal for $22.5 which minus transaction costss equaled $19.8 million. Annual leasw payments will be about $3.4 million.
the assets and long-term debt in the amount of the proceeds remaimnon YRC’s balance Half the proceeds went into an escroew account; the rest were used to pay down YRC’sx credit facility, the filing said. The price, aboutg $76 a square is consistent with that of older Classe B office properties in SouthernJohnson County, said Tim executive vice president of . Office buildings in that area can rangrfrom $70 to $160 a square foot for Classx B-minus through Class A spacs and various tenant he said.
The property never was publicly onthe market, Schaffer Other price factors include the tenant’s credit, the reuse potentialp of buildings, the risk level, the buildings’ age, the agreed-upom rent, and taxes and operatinhg costs. “You’ve got to assume when you’re buyinv it that you’ve got a good ulterior plan in case thatcompanh doesn’t exist at some point during that 30-year lease,” Schaffet said.
“It speaks to the quality of the location for a grouo to take that level of The headquarters, which looms over Interstats 435 on Roe offers “some pretty amazing opportunities that don’t exisr anywhere else in a mature environmenty like that,” he Analyst David Silver of said YRC’s propert y sales provide vital liquidity in the short term. Long they force YRC to focuw on its core holdings and integrate into a solid company, he said. YRC seemse to be accepting low offers, said Silver, who doesn’tg own YRC shares. “People that they’rs selling to see blood in thewater — they’re reallg taking advantage,” he said.
“Three years ago, if they had they would have gotten much better But they’re getting somewhaf fair values.” YRC — which postede a $257.4 million loss in the first quarte — has cut wages in exchangse for ownership in the company, eliminated thousandsd of jobs, amended bank covenants and begun negotiatin to defer $120 million in uniom pension fund payments usinhg real estate as collateral. With slumping freighgt volumes, the company accelerated the integration of creating excess propertyand layoffs. In the second quarter, YRC expectds to do about $200 million in sale-leasebacks, Chairmabn and CEO Bill Zollars said in arecenf presentation.
The company plansw at least $100 million in excese property sales this he said. Analyst Lee Klaskow of , who doesn’t own YRC shares, predicted earnings of 2 cents a sharew for allof 2010. Silvefr estimated a return to profitability by the secondd quarterof 2010.