Thursday, February 12, 2015

iHM Gets Landlord In San Antonio

W. P. Carey Inc., a global net lease REIT specializing in corporate sale-leaseback financing, build-to-suit financing and the acquisition of single-tenant net lease properties, announced Wednesday the acquisition of an office and data center facility on behalf of CPA:17 – Global, one of its managed non-traded REITs.

The 120,147 square-foot facility is located at 200 E. Basse Road in San Antonio, Texas and will be leased back to iHeartCommunications, Inc. for a period of 20 years.  The total acquisition price was approximately $22 million.

Constructed in 2002 as a build-to-suit for Clear Channel, the facility serves as the company's primary IT and finance shared service center.

W. P. Carey Managing Director and Co-head of Global Investments, Jason Fox, commented: "Given the valuable data center space and improvements to the building, we believe that we were able to acquire the facility at below replacement cost.  The terms of the triple-net lease provide for an attractive initial cap rate, as well as annual built-in rent increases.  iHeartCommunications' position in the broadcast and outdoor advertising sector and the highly critical real estate make for what we believe will be a long-term, income-generating investment for CPA:17 – Global's investors."

“Nobody is moving or leaving the company as a result,” said Wendy Goldberg, executive vice president for communications in New York City, in an email last October to the San Antonio Express-News. “This is part of our liquidity strategy, and it’s a financially efficient way to manage our assets.”

Most of the iHeartMedia executives work in New York City and elsewhere. Only about 30 percent of the company’s executives work in the San Antonio corporate office, running the information technology, accounting and legal functions.

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