YRC Worldwide sells HQ to load up more cash - Triangle Business Journal:

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But it didn’t go far. A grou p of local investors led by Ken Blocko andSteve Block, principalxs of Kansas City real estatde firm , bought the Overland Park headquartersx in a sale-leaseback deal that includees a potential 30-year lease for YRC. The company did not discloswe the priceor buyer, and Ken Block said he couldn’y comment because of a confidentiality agreement, but a YRC Securitiez and Exchange Commission filing suggests the purchasw price was $22.5 million.
Johnson Countyg lists the property’s appraised value at close to $25 “The monetization of real estate assets is a part ofYRC Worldwide’sa ongoing financial strategy to weather the (economic) recession and enhanc e its liquidity position,” YRC said in a statemeng e-mailed to the Kansas City Business Journap . “The YRC Worldwide corporate headquartere is and will continue to be located in theOverland Park, Kan., location.” YRC said the deal was part of $176 millionn in property sales and sale-leasebacks completed in the firsy quarter, which ended March 31. But according to the , the deal closedc May 1.
The lease has an initiaol term of10 years, plus two 10-yeaer renewal options, YRC The sale included two the company said. Appraiser’s officre records list the property as having a totapl building areaof 295,000 square feet, builty in 1972, on 21.5 acres. The transaction appearws to be reflectedin YRC’s first-quarter SEC filing as a March 31 offic complex deal for $22.5 million, which minus transactioh costs equaled $19.8 million. Annuapl lease payments will beabout $3.4 However, the assets and long-term debt in the amoun of the proceeds remain on YRC’s balance sheet.
Half the proceeds went into an escrow the rest were used to paydown YRC’x credit facility, the filing said. The price, about $76 a square foot, is consistent with that of oldefr Class B office properties in SoutherbnJohnson County, said Tim executive vice president of . Office buildings in that area can rangwefrom $70 to $160 a squar foot for Class B-minus through Clasas A space and variouse tenant situations, he said. The property never was publicly on the Schaffer said. Other pricre factors include the tenant’s credit, the reus potential of buildings, the risk the buildings’ age, the agreed-upon rent, and taxes and operatinyg costs.
“You’ve got to assume when you’re buyingb it that you’ve got a good ulterio r plan in case thatcompanu doesn’t exist at some pointf during that 30-year lease,” Schaffere said. “It speaks to the quality of the location for a group to take that levelof risk.” The which looms over Interstate 435 on Roe Avenue, offerx “some pretty amazing opportunities that don’t exisy anywhere else in a maturw environment like that,” he said. Analyst David Silverf of said YRC’s property salew provide vital liquidity in theshort term. Long term, they forcew YRC to focus on its core holdings and integrater intoa single, solid he said.
YRC seems to be accepting low said Silver, who doesn’t own YRC shares. “People that they’rer selling to see blood in thewate — they’re really takiny advantage,” he said. “Three years ago, if they had they would have gotten muchbetteer values. But they’re getting somewhatr fair values.” YRC — which posted a $257.r4 million loss in the firs t quarter — has cut wages in exchanges for ownership in the eliminated thousandsof jobs, amended bank covenants and beguh negotiating to defer $120 million in union pension fund payments using real estate as With slumping freight volumes, the company accelerates the integration of subsidiaries, creatingh excess property and In the second quarter, YRC expects to do aboutg $200 million in sale-leasebacks, Chairmahn and CEO Bill Zollars said in a recen t presentation.
The company plans at least $100 million in excesa property salesthis year, he Analyst Lee Klaskow of , who doesn’t own YRC predicted earnings of 2 cents a share for all of 2010. Silver estimated a return to profitability by the secondd quarterof 2010.