Capital Automotive's Portfolio Exceeds $1 Billion in Assets Completes Approximately $54 Million in Acquisitions in Q400
18 January 2001
Capital Automotive's Portfolio Exceeds $1 Billion in Assets Completes Approximately $54 Million in Acquisitions in Q400
MCLEAN, Va., Jan. 18 Capital Automotive REIT
announced today that the Company has completed approximately
$54 million of acquisitions during the fourth quarter 2000. Consideration for
the acquisitions was approximately $42.8 million in permanent financing and
the remainder from a combination of funds drawn down on the Company's short-
term credit facilities and cash on hand. It is anticipated that the short-
term debt will be replaced with permanent financing during the first half of
2001. The average initial lease term for these acquisitions is 17.4 years,
with multiple renewal options. Investment spreads were consistent with the
Company's business plan.
Thomas D. Eckert, President and Chief Executive Officer, stated, "We
continue to focus our efforts on opportunistically acquiring high quality real
estate operated by large creditworthy dealer groups. We are extremely pleased
to exceed the one billion-dollar milestone but are even more proud of the
long-standing strength of our portfolio, which has not had a single rental
payment default. We remain confident that we can continue to prudently grow
our business while maintaining a portfolio consisting of superior credits.
Our portfolio rent coverage remains very strong with our average tenants' cash
flow exceeding 3.5 times the amount of their rental payments. We believe that
because of the strength of our tenants, stability of the cash flow of the
dealership industry as a whole, and the prudent underwriting that we perform,
Capital Automotive is poised for continued success in 2001 and beyond."
The significant acquisitions and their key strategic elements announced
today include:
-- Three properties including two new auto malls from Sonic Automotive,
Inc. and its affiliates totaling approximately
$34.1 million, located in Fort. Mill, South Carolina; Baytown, Texas;
and Carrollton, Texas. Seven franchises operate on the properties
consisting of Cadillac, Chevrolet, Chrysler, Ford, Jeep, and Volvo.
These properties were acquired and leased back to Sonic as part of a
$75 million commitment issued to Sonic at the end of the second
quarter of 2000. Approximately $46 million of the $75 million
commitment was used during the year 2000. Capital Automotive
currently leases 67 properties to Sonic that were acquired for
approximately $294.1 million. Sonic is the second largest dealership
group in the United States with an estimated revenue run rate in
excess of $6 billion for 2000.
-- One new wholesale vehicle auction property from Auction Broadcasting
Company located in Nashville, Tennessee, totaling $9.7 million.
Auction Broadcasting is one of the premier wholesale auction companies
in the country. Auction Broadcasting was founded by the former senior
executives of ADESA Corporation, which is the second largest auction
chain in the United States. ADESA went public in 1992 and was sold to
Minnesota Power, Inc. in 1995. Capital Automotive currently leases
two properties to Auction Broadcasting that were acquired for
approximately $19.2 million. Auction Broadcasting is the third
largest wholesale vehicle auction company in the nation, currently
operating six wholesale auctions with one additional location under
construction.
-- One property from the Midwestern Automotive Group, a premier new and
used vehicle retailer, in Dublin, Ohio for $4.4 million. Midwestern
Automotive is the nation's largest dealership group of European
brands, operating eleven luxury new vehicle lines from two locations.
These brands consist of Aston Martin, Audi, Bentley, BMW, Ferrari,
Land Rover, Lotus, Porsche, Rolls Royce, Saab and Volkswagen.
-- Facility improvements on previously acquired properties totaling
approximately $5.2 million for Sonic. Two franchises (BMW and Lexus)
operate on the properties, as well as a state of the art body shop.
These properties are located in San Rafael, California; Atlanta,
Georgia; and Fairfax, Virginia.
Financial Outlook
David S. Kay, Vice President and Chief Financial Officer added, "The vast
majority of the acquisitions announced were completed in the final weeks of
the quarter and will not have a significant impact on the Company's fourth
quarter 2000 operating results. As a result, our guidance remains unchanged
from our third quarter earnings release and believe we will finish 2000 with
adjusted FFO (FFO excluding straight-line rents) at $1.73 per share. For
2001, we remain comfortable with the current analyst consensus adjusted FFO
estimate of $1.84 per share. Our current dividend run-rate is $1.54 per
share. As part of our continued commitment to return value to our
shareholders, we expect to increase the 2001 annual dividend by approximately
three percent. "
The Company's debt to assets (total assets plus accumulated depreciation)
ratio was approximately 55% as of December 31, 2000, which falls within the
Company's current policy of limiting debt to approximately 65% of assets.
Approximately 90% of the outstanding debt as of December 31, 2000 is
substantially match-funded, non-recourse debt. Virtually all of the Company's
debt is secured financing with a weighted average remaining term of
11.4 years, which approximates the remaining weighted average lease term of
11.7 years.
As of December 31, 2000, the Company's portfolio included 244 properties
with an asset value of $1.04 billion, consisting of 365 automotive franchises
in 27 states. Approximately 73% of the Company's properties are located in
the top 50 automotive markets in the country. The properties are leased under
long-term, triple net leases with an average initial lease term of 13.6 years.
The Company has entered into transactions with 15 of the top 100 dealer groups
in the country -- 14 of which are tenants. Approximately 66% of the Company's
annualized rental revenues are derived from this group of tenants.
Capital Automotive, headquartered in McLean, Va., is a self-administered,
self-managed real estate investment trust formed to acquire the real property
and improvements used by operators of multi-site, multi-franchised automotive
dealerships and related businesses. Additional information on Capital
Automotive is available on the Company's web site at
http://www.capitalautomotive.com .
To receive Capital Automotive's latest news and corporate developments via
fax at no cost, please call 1-800-PRO-INFO; use Company code CARS or visit The
Financial Relations Board's web site at http://www.frbinc.com .
Certain matters discussed within this press release are forward-looking
statements within the meaning of the federal securities laws. Although the
Company believes that the expectations reflected in the forward-looking
statements are based upon reasonable assumptions, the Company's future
operations will depend on a number of factors that may differ, some
materially, from the Company's assumptions. These factors, which could cause
the Company's actual results to differ materially from those set forth in the
forward-looking statements, include risks that the Company's tenants will not
pay rent or that the Company's operating costs may be higher than expected,
risks of interest rate fluctuations impacting future acquisitions, risks that
additional acquisitions may not be consummated, environmental and other risks
associated with the acquisition and leasing of automotive properties and those
risks detailed from time to time in the Company's SEC reports, including its
annual report on Form 10-K and its quarterly reports on Form 10-Q. The
Company makes no promise to update any of the forward-looking statements, or
to publicly release the results if the Company revises any of them.