W. P. Carey Group Purchases Universal Technical Institute, Inc. Glendale Heights, Illinois Facility
24 October 2000
W. P. Carey Group Purchases Universal Technical Institute, Inc. Glendale Heights, Illinois Facility
$3.3 Million Sale-Leaseback of New Automotive Training Center
Marks Second Transaction with UTI
NEW YORK, Oct. 24 W. P. Carey & Co. LLC , a
leader in the ownership and net leasing of corporate properties, today
announced that it has closed on the acquisition of a new facility for
automotive training leased by Universal Technical Institute, Inc. (UTI) and
its subsidiary Custom Training Group (CTG). The facility, located in Glendale
Heights, Illinois, was purchased on behalf of Carey Institutional Properties
(CIP(R)). CIP(R), a public, non-traded real estate investment trust (REIT),
is a member of the $2.5 billion W. P. Carey Group.
The Glendale Heights facility consists of a 34,600 square foot industrial
flex space situated on a 3.2-acre site. It is located in the rapidly growing
North DuPage County industrial sub market of the Chicago metropolitan area.
Under the terms of the sale-leaseback transaction, the facility will be leased
to CTG based on a 15-year bond-type net lease. The total cost of the
facility, including funding for renovations will be approximately
$3.3 million.
Founded in 1965 in Phoenix, Ariz., UTI, Inc. is recognized as the nation's
leader in technical education training. UTI offers accelerated
career-specific training in automotive, diesel, heating/ventilation/air
conditioning/refrigeration, marine, motorcycle and personal watercraft. The
company has more than 800 employees and has graduated more than 50,000
professional technicians. Campuses are located in Phoenix, Ariz.; Rancho
Cucamonga, Calif.; Orlando, Fla.; Glendale Heights, Ill. and Houston, Tex.
UTI offers manufacturer-specific training to develop technicians who are
recognized and respected as professionals in the new service economy. Operated
by CTG, the new facility will provide specific training for Audi,
Mercedes-Benz, Volkswagen and Volvo. Upon graduation, students have excellent
employment opportunities with these participating manufacturers. CTG also has
contracts with other high-end manufacturers including BMW, Jaguar and Porsche.
The sale-leaseback is CIP's second transaction with UTI. In May 1993, CIP
closed on an $8.6 million sale-leaseback with UTI, purchasing a 103,000 square
foot facility in Glendale Heights leased to another UTI subsidiary, UTI of
Illinois. This bond-type net lease was due to expire in November 2011.
Simultaneously with CIP's acquisition of the new CTG facility, the term of the
original lease will be extended for an additional two years.
Commenting on the transaction, W. Sean Sovak, Executive Director of W. P.
Carey, stated, "This follow-on transaction exemplifies our ability to meet the
evolving financing needs of both new tenants and existing tenants such as UTI.
As a result of our experience working with leveraged recapitalizations and
other types of complex private equity structures, we were able to design a
transaction which many traditional financing sources would have found overly
challenging. To meet the needs of both UTI and its subsidiary CTG, we were
able to structure two separate sale-leaseback transactions. As a result the
parent company will be able to retain the benefits of the original off-balance
sheet financing and its subsidiary will avoid funding the renovations out-of-
pocket or via short-term construction funding."
Founded in 1973, W. P. Carey & Co. specializes in corporate real estate
financing using the corporate net lease, or sale-leaseback structure. The
firm and its affiliates is one of the largest lessors of net leased corporate
real estate in the nation. W. P. Carey & Co. LLC , the largest
publicly traded limited liability company in the world, owns and manages over
38 million square feet of property in the USA and Europe. More information on
CIP(R) can be found on the company's Website:
http://www.careyinstitutional.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.