Capital Automotive Increases Portfolio to Approximately $600 Million
7 April 1999
Capital Automotive Increases Portfolio to Approximately $600 Million; Completes $88 Million in Acquisitions in First Quarter 1999
MCLEAN, Va., April 7 -- Capital Automotive REIT
today announced that the Company has closed approximately
$88 million of acquisitions for the first quarter ending March 31, 1999.
Consideration for the acquisitions was $84.2 million in cash and $3.8 million
in operating partnership units issued at an average price of $14.25 per share.
The cash was funded from the proceeds of the Deutsche Bank $150 million
permanent loan that closed in the fourth quarter of 1998 and funding from the
$70 million secured revolving credit facilities announced today. The
acquisitions include 22 dealership properties in five states, representing
19 franchises. Cap rates on these transactions are consistent with Capital
Automotive's business plan. The Company's weighted average initial cap rate
remained at 10.6%. Significant acquisitions included:
-- Eight properties from Group 1 Automotive, Inc. and its affiliates
located in Houston, Austin, Kingwood and Round Rock, Texas. Group 1
operates five franchises on the properties, including Toyota, Lexus,
Mitsubishi, and Nissan. The Toyota franchise is the number two Toyota
Dealership in new car sales in the United States and is ranked as the
number one pre-owned Toyota dealership in the nation. Group 1
Automotive, Inc., headquartered in Houston, is a leading operator and
consolidator in the highly fragmented automotive retailing industry.
-- One property from Park Place Motorcars located in Dallas, Texas. Park
Place Motorcars operates three franchises on the property, including
Mercedes-Benz, Porsche and Audi. Park Place's Mercedes-Benz franchise
is among the top 10 Mercedes-Benz franchises in the country.
Mr. Kenneth L. Schnitzer, Park Place's current President and CEO, was also
named a premier Porsche dealer for two consecutive years. Mr. Schnitzer is a
past chairman of the Mercedes-Benz Dealer Council and is a 1998 recipient of
the American International Automobile Dealers Association's "All Star Dealer
Award." Park Place is also one of the largest Lexus dealers in the state of
Texas and is a four-time winner of the "Elite of Lexus Award."
-- One property from FirstAmerica Automotive, Inc. located in San Rafael,
Calif. The property is currently being developed by FirstAmerica and,
when completed, FirstAmerica will operate a Dodge franchise on the
property. FirstAmerica operates 15 franchises throughout California.
-- Three properties from McCluskey Chevrolet, a Cincinnati, Ohio-based
group. McCluskey Chevrolet, founded by CEO Dan McCluskey in 1973, has
received several prestigious awards and honors including being named
as a national finalist in the Small Business category for the "1997
National Quality Cup Competition," GMC's "Five Star Performer Award"
and "Showcase Dealer for Service Supremacy."
-- Four properties from the Craig Zinn Automotive Group, located in
Hollywood, Fla. Founded by CEO Craig Zinn in 1981, the group operates
two franchises on the properties. The Craig Zinn Automotive Group has
received several prestigious awards and honors including: a nine-time
winner of the "Toyota President's Award" and a three-time winner of
the "Elite of Lexus Award." Zinn is a member of the Toyota Board of
Governors, President's Leadership Board, and Parts and Services
Advisory Councils. Toyota of Hollywood's Used Car Department, Parts
Department and Service Department volume ranks in the top 10
nationally.
-- Three properties from affiliates of the Asbury Automotive Group, one
of the Top 100 dealer groups in the country as ranked by Automotive
News. The properties are located in Plano and Houston, Texas and
Jacksonville, Fla. The properties are leased to an affiliate of
Saturn Corporation, a subsidiary of General Motors. Three Saturn
franchises are operated on the properties.
-- Two properties from Mulkin Automotive Group, located in Brockport,
N.Y. Mulkin Automotive Group was founded by John Mulkin in 1964,
and operates five franchises on the properties, including Chevrolet,
Oldsmobile, Pontiac, Buick and GMC. Mulkin Automotive has received
numerous awards including the "Pontiac GMC Class of Distinction 1998"
and "Only the Best of Buick 1997."
Thomas D. Eckert, President and Chief Executive Officer, stated, "We
continue to monitor the capital markets and industry trends and are managing
our investments to provide enhanced returns with minimal risk to our
shareholders. The Company has completed nearly $600 million in acquisitions
since its initial public offering in February 1998. We have created
significant relationships within the industry and will continue to leverage
these relationships as we grow."
Capital Automotive currently owns 142 properties including 215 automotive
franchises representing 36 brands in 19 states. Capital Automotive's
portfolio includes a total of 5.0 million square feet of buildings on
793 acres of land. The properties are leased on a long-term, triple-net basis
to 34 dealership groups, 12 of which are among the top 100 dealer groups in
the country according to Automotive News.
Capital Automotive REIT, headquartered in McLean, Va., is the only real
estate investment trust formed to acquire the real property and improvements
used by operators of multi-site, multi-franchised motor vehicle dealerships
and motor vehicle related businesses. Additional information on Capital
Automotive REIT is available on the Company's web site at
http://www.capitalautomotive.com.
The matters discussed in this press release include forward-looking
statements. In addition, when used in this press release, the words "intends
to," "believes," "anticipates," "expects," "pro forma" and similar expressions
are intended to identify forward-looking statements. Such statements are
subject to a number of risks and uncertainties. Actual results in the future
could differ materially and adversely from those described in the
forward-looking statements as a result of various important factors, including
the general economic climate, the supply of and demand for automotive
properties, interest rate levels, the availability of financing, and other
risks associated with the acquisition and leasing of properties, including
risks that the tenants will not pay rent or that operating costs may be
greater than anticipated, acquisitions that are pursued by the Company may not
be consummated for a variety of reasons, including the failure to reach
agreement with the seller and the other risk factors set forth in the
Company's filings with the Securities and Exchange Commission. The Company
undertakes no obligation to publicly release the result of any revisions to
these forward-looking statements that may be made to reflect any future events
or circumstances.