Equity Office Sells $1.3 Billion of Assets in Second Quarter 2005; Company Reduces Intended Holding Period on 53 Additional Asse
June 30 2005 - 5:08PM
Business Wire
Equity Office (NYSE:EOP) announced the sale of 60 assets totaling
7.5 million square feet for $1.3 billion in second quarter 2005.
The company expects to recognize, subject to closing adjustments,
approximately $80 million of gains and $170 million of non-cash
impairment charges related to sales that closed in the second
quarter. As a result of the acceleration of its disposition plans,
Equity Office also announced today that it will recognize an
impairment charge due to a reduction in the intended holding period
on 53 additional assets totaling 6.7 million square feet and
various land parcels that it anticipates selling after June 30,
2005. The additional impairment charge of approximately $200
million to $215 million will be recognized in the second quarter
and will reduce net income and funds from operations. The company
anticipates that future gains on the portfolio it currently intends
to sell will be equal to or greater than the impairment charges
resulting from this holding period reduction. If the asset sales
are not completed at estimated pricing levels, further impairment
charges could be required or gains may not be realized as
anticipated. "With total year-to-date asset sales of $1.6 billion,
we are currently on target to sell $2 billion to $3 billion of
assets by year end," commented Richard Kincaid, Equity Office's
president and chief executive officer. "In spite of the accounting
charges, it is the right business decision to take advantage of
today's strong asset-sale environment to sell non-strategic
properties, and to continue to focus our portfolio on the best
assets in targeted growth markets." Attached to this release is a
complete list of properties sold in first and second quarter 2005,
including locations and closing dates. Equity Office Properties
Trust (NYSE:EOP), operating through its various subsidiaries and
affiliates, is the nation's largest office real estate investment
trust with a portfolio of 634 buildings comprising 117.4 million
total office portfolio square feet in 18 states and the District of
Columbia. Equity Office has an ownership presence in 26
Metropolitan Statistical Areas (MSAs) and in 114 submarkets,
enabling it to provide a wide range of office solutions for local,
regional and national customers. For more company information,
visit the Equity Office website at www.equityoffice.com. Forward -
Looking Statements This release includes certain "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on
management's present expectations and beliefs about future events.
As with any projection or forecast, these statements are inherently
susceptible to uncertainty and changes in circumstances. Important
factors that could cause actual results to differ materially from
those reflected in such forward-looking statements and that should
be considered in evaluating this release and the outlook of Equity
Office include, but are not limited to, the following: declines in
overall activity in our markets have adversely affected our
operating results and are expected to continue to adversely affect
our operating results until market conditions further improve; in
order to continue to pay distributions to our common shareholders
at current levels, we must borrow funds or sell assets; we expect
to be a net seller of real estate in 2005, which will further
reduce our income from continuing operations and funds from
operations and may result in gains or losses on sales of real
estate and impairment charges; our properties face significant
competition; we face potential adverse effects from tenant
bankruptcies or insolvencies; competition for acquisitions or an
oversupply of properties for sale could adversely affect us; our
ability to dispose of assets on terms we find acceptable will be
subject to market conditions we do not control; and an earthquake
or terrorist act could adversely affect our business and such
losses, or other potential losses, may not be fully covered by
insurance. These and other risks and uncertainties are detailed
from time to time in Equity Office's filings with the SEC,
including its 2004 Form 10-K filed on March 16, 2005 and Form 8-K
filed on May 20, 2005. Equity Office is under no obligation to, and
expressly disclaims any obligation to, update or alter its
forward-looking statements, whether as a result of changes, new
information, subsequent events or otherwise. -0- *T Property
Closing Date Location
----------------------------------------------------------------------
First Quarter Dispositions Comprising 1.6 Million Square Feet:
$297.6 Million
----------------------------------------------------------------------
Northland Plaza 01/04/2005 Bloomington, MN Meier Central
North-Buildings 13 & 14 01/20/2005 Santa Clara, CA Water's
Edge(a) 02/01/2005 Marina Del Rey, CA One, Two & Three Devon
Square 02/11/2005 Wayne, PA Meier Central South - Building 12
02/22/2005 Santa Clara, CA One, Two, Three, Four & Five Valley
03/02/2005 Suburban, PA Square; Oak Hill Plaza; Walnut Hill Plaza;
and Four Falls Oak Creek I 03/15/2005 Milpitas, CA Meier Central
North - Building 15 03/24/2005 Santa Clara, CA Second Quarter
Dispositions Comprising 7.5 Million Square Feet: $1.28 Billion
----------------------------------------------------------------------
545 E. John Carpenter Freeway and 909 04/01/2005 Irving, TX Lake
Carolyn Parkway 70-76 Perimeter Center 04/05/2005 Atlanta, GA Meier
Central South - Building 11 04/18/2005 Santa Clara, CA Colonnade I,
II, & III 04/26/2005 Dallas, TX LL&E Tower 05/04/2005 New
Orleans, LA Preston Commons and Sterling Plaza(a) 05/20/2005
Dallas, TX Oak Creek II 05/25/2005 Milpitas, CA Concar(a)
05/26/2005 San Mateo, CA The Solarium 05/27/2005 Denver, CO Point
West I & Point West III 06/13/2005 Sacramento, CA Sierra Point
06/15/2005 Brisbane/ Daly City, CA BP Tower/Garage 06/24/2005
Cleveland, OH 301 Howard Street & Foundry Square II 06/24/2005
San Francisco, CA Parkside Towers 06/24/2005 Foster City, CA San
Rafael Corporate Center & Land 06/24/2005 San Rafael, CA
Shoreline Technology Park 06/28/2005 Mountain View, CA Seaport
Centre & Seaport Plaza 06/28/2005 Redwood City, CA 1871 The
Alameda 06/28/2005 North San Jose, CA 5813 Shellmound Street, 5855
Christie, 06/28/2005 Emeryville, CA and Baybridge Office Plaza *T
(a) These assets were owned in joint ventures
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