Capital Automotive REIT, a specialty finance company for automotive retail real estate, announced yesterday the acquisition of nine automotive retail properties for approximately $102.4 million from CarMax, division of Circuit City Stores, Inc. This acquisition added approximately 413,000 square feet of buildings and improvements on approximately 116 acres of land in seven states (California, Florida, Maryland, South Carolina, Tennessee, Texas and Virginia).
Eight used-car superstores and five new-car franchises are operated on these nine properties including, and . These properties have initial lease terms of 15 years and have multiple renewal options. The transaction was funded with the net proceeds from Capital Automotive's underwritten public equity offering that closed on August 8, 2001 and the remainder with long-term debt from Toyota Financial Services.
Thomas D. Eckert, President and Chief Executive Officer for Capital Automotive states "CarMax's strong cash flow, solid balance sheet, and prudent growth plans" make them "an ideal long-term partner."
The alliance provides CarMax with "an attractive form of capital through sale-leaseback transactions," says Keith D. Browning, Executive Vice President and Chief Financial Officer of CarMax.
With headquarters in Richmond, Va., CarMax currently operates 40 retail units in 37 locations, including 33 used-car superstores and 20 new-car franchises, most of which are integrated or co-located with its used-car superstores.
Capital Automotive, headquartered in McLean, Va., is a self-administered, self-managed real estate investment trust formed to acquire the real property and improvements used by operators of multi-site, multi-franchised automotive dealerships and related businesses. Capital Automotive currently owns 259 properties with an asset value of approximately $1.2 billion, consisting of 379 franchises in 27 states.