Glenborough (NYSE:GLB)
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Glenborough Realty Trust (NYSE:GLB)(NYSE:GLB PrA)
reported the following results of the final stages of its portfolio
repositioning:
In the fourth quarter 2005, the Company sold seven properties for
total consideration of $115.4 million and expects to recognize gains
on sale of approximately $31.9 million. The Company also has four
property sales pending at December 31, 2005. These four property sales
total $57 million in consideration and are expected to result in a
gain on sale of approximately $7.3 million in the first quarter 2006.
The Company is in the process of recapitalizing and reducing its
interest in one of its land and development joint ventures. This
transaction is expected to be completed in the first quarter of 2006
and is expected to result in a net realizable value charge in the
fourth quarter 2005 of approximately $31.7 million.
These transactions substantially complete the Company's previously
announced portfolio realignment out of the mid-west and focus the
remaining properties in the Company's core markets of Washington DC,
Southern California, Northern New Jersey, Boston and Northern
California. Combined the Washington DC and Southern California markets
comprise 50% of the Company's property portfolio.
CLOSED TRANSACTIONS - FOURTH QUARTER 2005
In the fourth quarter, the Company sold seven properties for a
total consideration of $115.4 million and expects to recognize gains
on sale of approximately $31.9 million. The Company has now exited the
Chicago, Minneapolis and St. Louis markets.
-0-
*T
Property Market, State Size (SF)
Oakbrook Terrace Chicago, IL 232,000
Navistar Chicago, IL 474,400
Embassy Plaza Chicago, IL 136,700
Northglenn Denver, CO 65,000
Riverview Minneapolis, MN 227,100
Woodlands Plaza St. Louis, MO 81,500
Palms IV and North Las Vegas, NV 129,500
*T
PENDING TRANSACTIONS
The following four properties are expected to close within the
first quarter:
-0-
*T
Property Market, State Size (SF)
Thousand Oaks Memphis, TN 422,300
Capitol Center Des Moines, IA 165,127
Osram Indianapolis, IN 45,265
Vreeland Florham Park, NJ 133,090
*T
The total sale price for these four properties is $57 million and
the Company expects to recognize a gain on sale of approximately $7.3
million in the first quarter 2006.
The Company is also in the process of recapitalizing and reducing
its interest in one of its land and development joint ventures. The
recapitalization will result in a net realizable value charge of
approximately $31.7 million in the fourth quarter. If completed, the
proceeds will be available to invest in the Company's core business,
reduce debt and/or repurchase stock.
The Company expects to recognize a net realizable value reserve of
approximately $2.3 million on a note receivable which was partial
consideration for a property sold in 2004. The consideration for all
property sales in 2005 was comprised of cash and the assumption of
existing financing by the buyers.
CONFERENCE CALL
Glenborough will host a conference call to discuss these matters
along with the results of the fourth quarter and full year 2005 on
Tuesday, February 7th, 2006 at 1:30 p.m. Eastern Time (10:30 a.m.
Pacific Time). Interested parties can listen to the call by calling
1-800-967-7184, confirmation number 9570645 preferably 5-10 minutes
before the scheduled time. In addition, a replay of the call will be
available until Friday, February 10th 2006 at 5:00 p.m. Pacific Time
at 1-888-203-1112, confirmation number 9570645.
Glenborough is a REIT which is focused on owning high quality,
multi-tenant office properties concentrated in Washington D.C.,
Southern California, Northern New Jersey, Boston and Northern
California. The Company has a portfolio of 48 properties encompassing
approximately 8.7 million square feet as of December 31, 2005.
FORWARD LOOKING STATEMENTS: Certain statements in this press
release are forward-looking statements within the meaning of federal
securities laws, including without limitation statements concerning
plans, objectives, goals, strategies, expectations, intentions,
projections, developments, future events, performance or products,
underlying assumptions, and other statements which are other than
statements of historical facts. In some cases, you can identify
forward-looking statements by terminology such as "may," "will,"
"should," "expects," "intends," "plans," "anticipates,"
"contemplates," "believes," "estimates," "predicts,"
"projects," "potential," "continue," and other similar
terminology or the negative of these terms. Because these forward
looking statements involve risk and uncertainty, there are important
factors that could cause our actual results to differ materially from
those stated or implied in the forward-looking statements. Those
important factors include:
-- Purchaser default risk relative to the pending transactions
referenced above.
-- Casualty and/or condemnation risk relative to the pending
transactions referenced above.
-- Our inability to locate suitable buyers for our listed assets
who are ready, willing and able to close transactions at the
sales price we anticipate;
-- Increased costs of financing cause a reduction in demand for
commercial properties and therefore a reduction in the market
value of the assets listed for sale;
-- Lower than expected retention of existing tenants negatively
affects the value of the assets listed for sale, and/or tenant
disputes or defaults negative affect the closing of the
pending transactions.
-- Changes in market rental rates for office space negatively
affect the value of the assets listed for sale;
-- Changes in market conditions render the repurchase of our
stock imprudent;
-- Our inability to locate and acquire suitable property at
reasonable prices in our core markets;
-- The failure of the economy to continue its expansion;
-- The effect of any future impairment charges associated with
asset disposition or market conditions.
Given these uncertainties, readers are cautioned not to place
undue reliance on such statements. All forward-looking statements are
based on information available to us on the date hereof and we assume
no obligation to update or supplement any forward looking-statement.
Additional information concerning factors that could cause results to
differ can be found in our filings with the SEC including our report
on Form 10-K/A for the year ended December 31, 2004 and our quarterly
reports on Forms 10-Q for the periods ended March 31, 2005, June 30,
2005, and September 30, 2005.