Falcon Advises on Purchase of Two Industrial Portfolios

ACQUISITION

Falcon Advises on Purchase of Two Industrial Portfolios

In December 2006 Falcon Real Estate completed the purchase of two portfolios of warehouse and distribution buildings on behalf of one of our clients. The first portfolio was adjacent to the Memphis International Airport in Memphis, Tennessee, and the second portfolio was located in the Cleveland, Ohio, metropolitan area.

The Memphis portfolio contained nine-buildings having a total of over 1,140,000 square feet in total rentable area. Because Memphis is the international headquarters location of Federal Express Corporation, the Memphis International Airport is the busiest freight-handling airport in the world. The acquired buildings are adjacent to this airport and have attracted such well known tenants as Federal Express itself, the United States Postal Service, Toyota, DHL and R.R. Donnelley & Sons. The purchase price was $37,100,000. Financing for the acquisition was provided by Credit Suisse.

The Cleveland portfolio consisted of four buildings containing over 788,000 square feet. The buildings are located in two suburban markets in the Cleveland area, Solon and Strongsville. Solon, in the East Submarket, and Strongsville, in the Southwest Submarket, have both been among the strongest industrial markets in the region. The buildings were 93.5% occupied by quality local credits at the time of purchase, with much of the space leased until 2016. The purchase price for the portfolio was $48,500,000, and mortgage financing was provided by Credit Suisse.

Larry Dooley, Falcon’s acquisition representative on these two transactions, stated that Falcon was very pleased with these purchases since both provided relatively good current returns, together with the prospect of enhanced value over time.