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15 December 1999
Lend Lease and Equity Office Close JV Agreement
Lend Lease and Equity Office close JV Agreement CHICAGO, IL (December 15, 1999) - Equity Office Properties Trust (NYSE: EOP) and Lend Lease Real Estate Investments, Inc. announced today that Equity Office affiliates and Lend Lease U.S. Office, Inc. have entered into joint venture agreements, under which Lend Lease U.S. Office, Inc. has acquired interests in seven Equity Office assets for an investment of approximately $533.9 million. The office buildings, which are located throughout the United States, comprise 5.6 million square feet of office space.
The immediate use of the transaction's net proceeds to Equity Office of approximately $481 million (calculated prior to closing costs) will be to pay down outstanding amounts under the company's line of credit. Future uses are expected to include up to $250 million in a share buyback program, which has been approved by Equity Office's Board of Trustees and announced today in a separate release. Other future uses may include strategic acquisitions and the funding of certain corporate initiatives.
Managed by Lend Lease Real Estate Investments, Lend Lease U.S. Office Trust, the owner of Lend Lease U.S. Office, Inc., will be the first listed Australian property trust to specialize in office real estate assets in the United States. The Trust's initial public offering (IPO) closed oversubscribed on November 30, 1999.
"The genesis of this transaction is the development of a strategic alliance with a like-minded, high-quality global real estate firm," noted Tim Callahan, chief executive.officer of Equity Office. "Through this joint venture, we raised nearly half a billion dollars in capital, while retaining partial interests in, and the leasing and management of, these assets. This significantly enhances our overall return on capital associated with this portfolio.
"Ray D'Ardenne, chief operating officer of Lend Lease Real Estate Investments said, "Lend Lease's global scope and scale affords us the opportunity to bring new investment vehicles like this to the international market, in this case from Australia to the United States. This transaction emphasizes how Lend Lease's platform works to move capital between different world regions to take advantage of real estate investment opportunities. This transaction brings our total U.S. real estate acquisition volume to $1.7 billion since June 30, 1999."
Under the terms of the joint venture agreements, Lend Lease U.S. Office, Inc. acquires the following interests in the properties, for which Equity Office retains management and leasing responsibilities.
Property Primary | Market | Number of Buildings | Approximate Rentable Square Feet | Lend Lease's Ownership | Percent Occupied |
10 & 30 S. Wacker (a) | Chicago | 2 | 2,003,288 | 25.0% | 96.0% |
Bank One Center/Tower | Indianapolis | 2 | 1,057,877 | 75.0% | 93.7% |
Promenade II | Atlanta | 1 | 770,840 | 50.0% | 99.1% |
SunTrust Center | Orlando | 1 | 640,385 | 75.0% | 97.4% |
Sterling Plaza | Dallas | 3 | 418,604 | 50.0% | 83.8% |
Pasadena Towers | Dallas | 1 | 302,747 | 50.0% | 80.9% |
Pasadena Towers | Los Angeles | 2 | 439,367 | 75.0% | 88.8% |
| | 12 | 5,633,108 | | |
| Notes: |
(a) Lend Lease has the option to increase its ownership by an additional 25% by December 13, 2001 at the greater of 25% of Fair
Market Value or $122.5 million. |
Equity Office Properties Trust (NYSE: EOP) is the United States' largest publicly held owner and manager of office properties, with a national portfolio of 291 buildings comprising 76.6 million square feet in 23 states and the District of Columbia. Equity Office has an ownership presence in 35 Metropolitan Statistical Areas (MSAs) and in 81 submarkets, enabling it to provide a wide range of office solutions for local, regional and national customers. For more company information visit the EOP website at www.equityoffice.com.
Lend Lease Real Estate Investments ranks as one of the leading U.S. managers of tax exempt assets invested in real estate, and has $30.6 billion in its U.S. real estate and mortgage portfolios. The company operates from more than 30 offices on five continents: North America, Europe, Asia, Australia and South America. It is a subsidiary of Lend Lease Corporation, an international real estate and financial services group listed on the Australian Stock Exchange (LLC). Worldwide, the Lend Lease Group has $38.2 billion in real estate assets under management. In addition to real estate investments, the Lend Lease Group operates in the areas of property development, project management and construction, and financial services. Financial services activities for the Group include funds management, life insurance, and wealth protection. Lend Lease Corporation has total funds under management and administration of $56.3 billion and a market capitalization of $6 billion. For more company information visit the Lend Lea se Real Estate Investments website at www.lendleaserei.com .
Certain matters discussed within this press release may be deemed to be forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Equity Office Properties Trust believes the expectations reflected in such forward looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. In particular, statements as to the anticipated future usage of the proceeds from the joint venture are subject to numerous future contingencies, such as competing demands for capital, Equity Office's continued borrowing ability and the pricing of available real estate and other investments. Factors of a general nature that could cause actual results to differ materially from Equity Office's expectations are detailed from time to time in the company's SEC reports and filings, including its annual report on Form 10K. The Company assumes no obligation to update or supplement forward looking statements that become untrue
because of subsequent events.
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Contact:
Lend Lease
Mary Beth Lally
404.848.8662media
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