Question-and-Answer Session
Operator
Your first question comes from the line of Jonathan Habermann - Goldman Sachs.
Jonathan Habermann - Goldman Sachs & Co.
First question concerning the real estate sales, could you just talk a bit about the reasons for selling? Is this simply there is no more value or you fully realized the value there? And secondly, why Dallas? I know it looks like an interesting opportunity, but can you talk about the yields you are forecasting and how much incremental dollars you might invest for potential future development there?
Allen Doane
Stan, why did we sell and why did we buy?
Stanley Kuriyama
This is just a continuation really of our core strategy. So, in the cases of these three properties, they really were unsolicited offers. But the properties, in the case of the two shopping centers, were fully mature. We had maximized value. Prices that came in for these properties were at full value, so it was a good time to sell.
And as far as Dallas is concerned, we’ve been in the market for a number of months looking for replacement properties. We really liked this Dallas property. It’s in a great location - it’s immediately adjacent to the Dallas Fort Worth Airport. We like the logistics angle of this purchase. I think certainly on a long-term basis, this can complement our logistics business at Matson. We bought this property at a low-6 cap rate and the properties we sold were a sub-6 cap rate. We got a spread there and of course, we are using the 1031 benefit to enhance our returns from that Dallas investment.
Jonathan Habermann - Goldman Sachs
What sort of growth do you anticipate from that property?
Stanley Kuriyama
Market rates of growth; it’s fully occupied. Rents are at or slightly below market, but we don’t anticipate any unusual growth there, but we do expect that it will grow consistent with the market.
Jonathan Habermann - Goldman Sachs
In terms of just anticipated property sales heading into next year, do you anticipate having a few more of these types of sales?
Stanley Kuriyama
Yes, we do. We are evaluating various sales prospects now and we will continue to have these sales throughout the year.
Allen Doane
I will just emphasize that this is a pretty big whopper of a quarter here, both in terms of a sale and some reinvestments, but it is a long-term strategy for the company that we’ve replicated year-after-year. We think we are going to do the same thing in ?08.
- To read the full transcript on Seeking Alpha, click here »
