YRC Worldwide sells HQ to load up more cash - bizjournals:

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But it didn’t go far. A group of locak investors led by Ken Blockl andSteve Block, principals of Kansas City real estate firm , bought the Overland Park headquartersz in a sale-leaseback deal that includes a potentiapl 30-year lease for YRC. The company did not disclose the pricor buyer, and Ken Block said he couldn’tg comment because of a confidentialityh agreement, but a YRC Securitiezs and Exchange Commission filing suggests the purchase prices was $22.5 million.
Johnson Countty lists the property’s appraised value at close to $25 “The monetization of real estatr assets is a part ofYRC Worldwide’s ongoinbg financial strategy to weather the (economic) recession and enhanced its liquidity position,” YRC said in a statemen t e-mailed to the Kansas City Business Journal . “The YRC Worldwide corporate headquarters is and will continue to be locatec in theOverland Park, Kan., location.” YRC said the deal was part of $176 millionm in property sales and sale-leasebacks completed in the first which ended March 31. But according to the , the deal closede May 1.
The leas e has an initial term of10 years, plus two 10-yeaer renewal options, YRC said. The sale included two buildings, the company said. Appraiser’s officew records list the property as having a totalp building areaof 295,000 square feet, builty in 1972, on 21.5 acres. The transactionn appears to be reflectedin YRC’s first-quarterf SEC filing as a Marchg 31 office complex deal for $22.65 million, which minus transaction costs equaled $19.8 Annual lease payments will be about $3.4 million. However, the assetes and long-term debt in the amount of the proceeda remainon YRC’s balance sheet.
Half the proceedsw went into anescrowe account; the rest were used to pay down YRC’ws credit facility, the filinfg said. The price, about $76 a squarr foot, is consistent with that of older Class B office properties in SouthernJohnson County, said Tim executive vice president of . Office buildingx in that area can rangefrom $70 to $160 a squarse foot for Class B-minus throug h Class A space and various tenanr situations, he said. The property never was publicluy onthe market, Schaffer said. Other priced factors include the tenant’s credit, the reuse potential of buildings, the risk the buildings’ age, the agreed-upon and taxes and operating costs.
“You’ve got to assume when you’rse buying it that you’ve got a good ulterior plan in case thatcompanyt doesn’t exist at some point during that 30-yead lease,” Schaffer said. “It speakz to the quality of the locationb for a group to take that levelof risk.” The which looms over Interstate 435 on Roe offers “some pretty amazing opportunities that don’g exist anywhere else in a mature environment like he said. Analyst David Silver of said YRC’sz property sales provide vital liquidity in theshorg term.
Long term, they force YRC to focus on its core holding s and integrate intoa single, solid company, he YRC seems to be accepting low said Silver, who doesn’t own YRC “People that they’re selling to see blood in the water they’re really taking advantage,” he said. “Threer years ago, if they had sold, they would have gottenb much better values. But they’re getting somewhay fair values.” YRC — which posted a $257.
4 million loss in the firsf quarter — has cut wageds in exchange for ownership in the eliminated thousands of amended bank covenants and begun negotiating todefer $120 million in unioj pension fund payments usingv real estate as collateral. With slumping freight volumes, the company accelerateds the integration of creating excess propertyand layoffs. In the secondc quarter, YRC expects to do about $200 million in sale-leasebacks, Chairman and CEO Bill Zollars said in arecenf presentation. The company plans at least $100 milliomn in excess property salexthis year, he said.
Analysf Lee Klaskow of , who doesn’ty own YRC shares, predicted earningz of 2 cents a share for allof 2010. Silveer estimated a return to profitability by the seconsd quarterof 2010.