RUBICON America Trust has sold almost half of its property portfolio to investment advisors UrbanAmerica in a deal which will see the trust maintain a small interest.
RAT has sold the GSA I Portfolio a 14 property portfolio covering 3.1 million sq ft for $US515.0 million – which is approximately $US6.3 million higher than the revaluation of the portfolio as at June 30. The trust originally purchased GSA I Portfolio in 2006 for $US522.6 million.
The sale is conditional upon the completion of due diligence and assumption of the $US389.0 million senior debt.
As part of the completion of the transaction, RAT will subscribe for $US30.0 million of preferred equity in UrbanAmerica’s dedicated ownership vehicle which has bought the assets.
So after the $389.0 million secured debt, $6 million in transaction costs and $30 million to invest in the special vehicle, RAT will be left with $US90 million in net proceeds.
And after taxes payable, the proceeds will be applied to reduce RAT’s overall borrowing.
Yesterday’s sale is part of the trust’s wider strategy announced in March this year, to reduce debt by selling approximately $600 million – $800 million in assets over the next 12 months.
These initiatives are expected to raise around $200 million – $250 million which will be used to repay short term debt and reduce gearing to around 55% to 65%.
Australian Property Journal