iStar Inc. has completed the previously announced sale of a portfolio of owned and managed net lease assets to an affiliate of Carlyle’s Global Credit platform for $3.07 billion.
The portfolio consists of 18.3 million square feet of institutional quality office, entertainment, and industrial properties located throughout the country.
“The sale of this net lease portfolio represents a meaningful step forward in the strategy we laid out at the beginning of last year to simplify our business and strengthen our balance sheet,” said Jay Sugarman, Chairman and Chief Executive Officer. “As a result, we’ll be able to capture a significant gain, de-leverage the balance sheet and pay off nearly all of our secured debt, enabling us to continue scaling the ground lease ecosystem.”
The company currently estimates that the transaction will generate a positive impact in the first quarter of approximately $570 million to net income allocable to common shareholders, approximately $580 million to common equity and approximately $310 million to adjusted common equity.
In addition, iStar estimates that the transaction will generate net cash proceeds to iStar of approximately $1.2 billion after associated fees, distributions to our JV partner, repayment of debt collateralized by the assets, repayment of the company’s senior secured term loan, distributions under iStar’s long-term incentive plan, iPIP, and other costs.
Separately, the company also sold additional net lease assets for a total gross purchase price of $108 million, which is expected to generate additional positive impacts in the first quarter.