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Case StudyCase Study: Investment Syndication

Situational Analysis
In the spring of 2009, a group of investors led by Block Real Estate Services, LLC (BRES) acquired the YRC Worldwide Headquarters Campus under a fifteen-year sale-leaseback with YRC Worldwide. The YRC campus includes three buildings totaling 382,937 square feet located in Overland Park, Kansas, the premier office submarket in the Kansas City Metropolitan Area.

At the time, YRC had poor credit and was struggling to meet its demands associated with an upcoming bond maturity. This allowed BRES to purchase the building for less than $60 per square foot, a very attractive price at a time when comparable buildings in the submarket were selling for $135 to $145 per square foot.

The initial capitalization rate was 15%, providing investors an outstanding cash-on-cash yield. Additionally, the sale-leaseback included development rights on approximately 11 acres, an estimated $5 million value.