posted on December 24, 2010 23:42
Real estate investment trust ProLogis (NYSE:PLD) said it has reached an agreement to sell its Catellus name and a portfolio of U.S. assets, including the Mueller Airport redevelopment project, to private-equity company TPG Capital for about $505 million, it was announced Tuesday.
The properties that will be sold include four shopping centers, two office buildings, 11 mixed-use projects with land and development agreements and Los Angeles Union Station. The deal is expected to be mostly finished in the first quarter of 2011.
A spokesman for Catellus told the Austin Business Journal that the ownership switch does not change the master development agreement between Catellus and the city of Austin and won’t speed or slow Mueller’s development. Also, no local management changes are expected as Catellus Development Group Managing Director Greg Weaver will remain in Austin overseeing Mueller’s redevelopment.
“I am happy to report that I will remain in Austin leading the work at Mueller along with continued company-wide responsibilities as a partner in the new Catellus," he said.
It is anticipated that the majority of ProLogis employees associated with the retail/mixed-use properties will be offered employment with Catellus, including those in Austin.
However, with the sale of those assets, ProLogis’s Chief Investment Officer Ted Antenucci, who joined ProLogis when it bought the Catellus assets in 2005, will leave the company to follow Catellus. He will be replaced by Mike Curless, ProLogis’s current managing director of global investments.
ProLogis said it plans to use the proceeds from the asset sale to repay debt and fund future development. The company said it expects to take charges or impairments related to the sale of $170 million to $190 million.
“The Catellus assets are high-quality with good long-term prospects, but they are not in keeping with our strategy to concentrate our investment in core industrial properties in the world’s major logistics corridors,” ProLogis CEO Walter C. Rakowich.
TPG leadership said in a statement that Catellus is a strong stand-alone company that will continue to perform well despite a slow economic recovery. TPG Capital is the global buyout group of TPG, a leading private investment firm founded in 1992, with more than $48 billion of assets under management and offices around the world with one in Fort Worth.
“We are excited to partner with the strong Catellus management team in the next chapter of the company’s evolution,” said Kelvin Davis, TPG senior partner. “The company is already well positioned through its diverse portfolio of high-quality, well-occupied assets in growing markets. As a standalone company, we believe the new Catellus will be in an excellent position to capitalize on the economic recovery and build on its strong footprint.”
12/21/10, Austin Business Journal, Francisco Vara-Orta