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CapLease, Inc (LSE) RSS Feed

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CapLease, Inc. is a real estate investment trust (REIT) that invests primarily in single tenant commercial real estate assets subject to long-term leases to high credit quality tenants. The Company focuses on properties that are subject to a net lease, or a lease that requires the tenant to pay all property operating expenses, such as utilities, real estate taxes, insurance and routine maintenance. Its primary business is the ownership of single tenant properties. It also has a portfolio of first mortgage loans and other debt investments on single tenant properties. Its tenants, including those underlying its debt investments, are primarily large public companies or their operating subsidiaries and governmental entities with investment grade credit ratings. It has classified three propertie as multi-tenant properties. The first property is located in Johnston, Rhode Island. The other two properties are located in Omaha, Nebraska: one on West Dodge Road and the other on Farnam Street. Owned Properties Owned properties consists approximately 82% of the Company’s portfolio on an investment basis. The Company invests in most commercial property types, such as office, warehouse, GSA and retail). As of December 31, 2010, it had 62 properties in 25 states and leases with 32 different tenants across the Single Tenant Owned Property Portfolio; approximately 11.2 million rentable square feet with 95.9% occupancy, and 95% investment grade or implied investment grade tenants in the Single Tenant Owned Property Portfolio. It invests in commercial property types (office, warehouse, General Services Administration (GSA) and retail). It owns the improvements on the land and control the land through an estate for years with an option to enter into a ground lease at the expiration of the estate for years (Nestle and Kroger properties). For each of these properties, it also has an option to purchase the land at the expiration of the estate for years and on the last day of the primary term and each renewal term of the ground lease for fair market value. The approximate duration of its interest in these properties assuming the full estate for years term, if any, and all ground lease options are exercised: Nestle properties, 62 years; Kroger properties, 71 years; Omaha, Nebraska properties, 65 years; Crozer-Keystone Health System property, 36 years; and Johnston, Rhode Island property, 49 years. Loan Investments Loan investments consists approximately 11% of its portfolio. Its existing loan investments include long-term mortgage loans, corporate credit notes and a single mezzanine investment. With the exception of the one mezzanine investment, all of its loans are secured by a first mortgage on the related property and an assignment of the tenant’s lease and rents. As of December 31, 2010, the Company’s portfolio included $190.8 million of long-term mortgage loans. Its corporate credit notes represent one of two notes comprising a single first mortgage loan on a net lease property. As of December 31, 2010, its portfolio included $19.1 million of corporate credit notes. Its only mezzanine investment as of December 31, 2010, was $1.4 million of remaining principal on its indirect investment in franchise loans to YUM! Brands, Inc. franchisees. CapLease, Inc. also offers a variety of other loan and loan type products primarily to owners of single tenant properties, including mezzanine loans, bridge loans, development loans and preferred equity financings. As of December 31, 2010, it had an approximately $210.9 million loan portfolio and loan investments on 63 properties in 25 states with 22 different underlying tenant obligors. As of December 31, 2010, real estate securities aggregated approximately $146.0 million, or approximately 7% of the Company’s portfolio. It invests in commercial mortgage-backed securities (CMBS), and other real estate securities. Its CMBS investments include senior, subordinate and interest-only classes of primarily net lease loan securitizations or pass through trusts. Its other real estate securities represent its pro rata investments in one or more first mortgage loans on properties net leased to a single tenant.
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