ZURICH TOWERS
QUICK FACTS:
- Corporate Headquarters to Zurich Financial Services in Schaumburg, Illinoi
- Exclusive advisor to Zurich Financial Services A
- 808,000 Square Fee
- 12-Year Sale/Leaseback
- $140 Million USD in Proceed
- Flat rent schedule for 22 year
- 45 day transaction
The Situation:
Zurich Insurance Group AG, a leading global insurance-based financial services provider with more than 140 years of experience, issued an RFP seeking a financial advisor to manage the execution of a sale/leaseback on its 808,000 square foot Class “A” headquarters facility in Schaumburg, Illinois.
Zurich’s objectives were to maximize proceeds on the sale, minimize ongoing rent in the leaseback, control the property under a defined rent schedule for a minimum of 20 years and close in a very tight timeframe.
Zurich selects Andrew Sandquist and CBRE as exclusive advisor on the sale/leaseback transaction
The Challenges:
- Condensed timeframe: 45-day window from issuance of RFP to market, select buyer, perform due diligence, negotiate lease and close the transactio
- Zurich initially desired a 20-year lease structure to maximize proceed
- Requirement for maximum proceeds in order to strengthen the parent company’s balance shee
- Requirement for flat rent structure for a minimum of 22 years
The Results:
- Andrew Sandquist suggests a marketing approach to Zurich that investors bid on both a 12-year and 20-year basis for the initial lease ter
- Offering marketed for two (2) weeks and required investors to include marked-up changes to the proposed contract and lease along with the LO
- Buyer chosen from more than 50 offers - - extremely competitive environment allowed Zurich to lock in flat rental rate 22-years via fixed renewal
- Structure allowed Zurich to fix occupancy costs for nearly 3,000 employees while extracting a significant capital gain during a period of record real estate valuation
- Transaction closes within the mandated 45-day period generating proceeds of $140 million USD
