Arizona Land Income Corporation (AMEX: AZL), a real estate
investment trust, and The Shidler Group, a national real estate
investment firm, www.shidler.com, today announced that they have
entered into a definitive agreement whereby AZL will acquire the
West Coast office portfolio of The Shidler Group, and reincorporate
in Maryland under the name Pacific Office Properties Trust, Inc.
(�Pacific Office Properties�). Pursuant to the agreement, the
ownership interests in ten Class A office properties controlled by
affiliates of The Shidler Group, located in Honolulu, San Diego and
Phoenix, will be contributed to an umbrella partnership (�UPREIT�)
to be formed by AZL. Reincorporated as Pacific Office Properties,
the Company will be externally managed by an affiliate of The
Shidler Group. The transaction has been approved by AZL�s Board of
Directors and is subject to approval by AZL�s shareholders. The
transaction is expected to close in January 2007. The major
benefits of the transaction are as follows: Immediately transforms
AZL into a West Coast office REIT with a strong core portfolio.
Adds Jay H. Shidler, a recognized leader in successfully managing
and growing public REITs, as Chairman of the Board and interim
Chief Executive Officer. Adds the proven acquisition team and
management systems of The Shidler Group. Adds an external advisor
management team experienced in the acquisition, redevelopment and
management of office properties in the relevant West Coast markets.
Provides greater access to the capital markets for debt and equity.
Under the terms of the agreement, the UPREIT will become the owner
of the contributed properties, comprising 2.8 million square feet
of office space, in exchange for limited partnership interests in
the UPREIT. Although AZL�s common stock will remain outstanding,
the UPREIT will issue common and preferred partnership interests,
which will be exchangeable in the future for shares of AZL common
stock. Prior to the closing of the transaction, it is expected that
AZL will declare and pay a special dividend of $1.00 per share of
its common stock. The transaction is valued at approximately $570
million. Thomas Hislop, CEO and Chairman of AZL, stated, �We are
extremely pleased to enter into this important transaction with The
Shidler Group. We believe that this transaction is in the best
interests of our shareholders, and is superior to the various other
strategic opportunities that we have considered over the past
several years. The transaction announced today is the culmination
of an exhaustive process that our company and its advisors have
conducted during the past two years, and the benefits to our
shareholders, both immediate and long-term, represent an exciting
end product of our search for strategic alternatives. The Shidler
Group is a proven performer in terms of public REIT operation and
creating growth in shareholder value, and we are delighted at the
prospects of becoming associated with them.� Jay Shidler, managing
principal of Pacific Office Properties and founder of The Shidler
Group, stated, �We are extremely enthusiastic about the opportunity
to take our high-quality West Coast office portfolio into the
public arena through this collaboration with AZL and Tom Hislop. We
intend to do everything that we can to nurture, expand and optimize
the value of the company, in an effort to maximize shareholder
value for all of the existing and future shareholders in AZL and
Pacific Office Properties Trust.� About Pacific Office Properties
Trust Pacific Office Properties Trust will be a real estate
investment trust which will acquire, own, and operate office
properties in the western U.S., focusing initially on the four
high-growth markets of Honolulu, San Diego, Los Angeles, and
Phoenix. The Company will focus on acquiring, with institutional
co-investors, �value-added� office buildings whose potential can be
maximized through improvements, repositioning, and superior leasing
and management. The Company will continue The Shidler Group�s
highly successful institutional joint-venture operations, which
focus on acquiring opportunistic and value-added commercial real
estate in partnership with institutional co-investors. About
Arizona Land Income Corporation Arizona Land Income Corporation is
a real estate investment trust headquartered in Phoenix, Arizona.
It is externally advised by ALI Advisors, Inc. and currently has a
portfolio of real estate and other assets aggregating approximately
$7 million. About The Shidler Group The Shidler Group is a private
long-term investor in commercial real estate. Over the past 30
years, through its private and public affiliates, it has acquired,
owned and managed more than 2,000 properties containing over 150
million square feet of leaseable area. Currently, The Shidler
Group, through its affiliates, owns and manages commercial
properties in Honolulu, Los Angeles, San Diego and Phoenix, and
maintains offices in Honolulu, San Diego, Phoenix and New York. The
Shidler Group has founded three publicly traded real estate
investment trusts -- Corporate Office Properties Trust (NYSE: OFC),
First Industrial Realty Trust (NYSE: FR), and Tri Net Corporate
Realty Trust (formerly, NYSE: TRI, now part of iStar Financial
(NYSE: SFI)). The Shidler Group also founded Primus Guaranty, Ltd.
(NYSE: PRS), a Bermuda-based holding company whose primary
subsidiary, Primus Financial Products, is a $15 billion, AAA/Aaa
rated provider of credit default protection. Credit Suisse
Securities (USA) LLC is acting as financial advisor to The Shidler
Group, and Peacock, Hislop, Staley, & Given, Inc. is acting as
financial advisor to AZL. Barack Ferrazzano Kirschbaum Perlman
& Nagelberg LLP is serving as legal advisor to The Shidler
Group, and Bryan Cave LLP is serving as legal advisor to AZL.
Additional Information and Where to Find It This press release does
not constitute a solicitation for votes for the transaction. In
connection with the proposed transaction, AZL expects to file a
proxy statement regarding the proposed transaction with the
Securities and Exchange Commission. Shareholders are urged to read
the proxy statement, because it will contain important information
about AZL and the proposed transaction. At the appropriate time,
shareholders will be able to obtain a free copy of the definitive
proxy statement and other documents filed by AZL with the SEC at
the SEC's website at www.sec.gov. The definitive proxy statement
and other relevant documents will also be available, free of
charge, from AZL by directing such request to Ms. Deanna Barela at
(602) 952-6821 or dbarela@phsg.com. Shareholders are urged to read
the proxy statement and other relevant material when they become
available before making any voting decisions with respect to the
transaction. AZL and its respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from the shareholders of AZL in connection with the
transaction. Information about AZL and its directors and executive
officers, and their ownership of AZL common stock, is set forth in
the proxy statement for AZL's Annual Meeting of Shareholders, which
was filed with the SEC on November 14, 2005. Additional information
regarding the interests of those persons may be obtained by reading
the proxy statement when it becomes available. Certain Information
about Forward-Looking Statements Statements contained in this
release except for historical information are forward-looking
statements that are based on current expectations and involve risks
and uncertainties. Without limiting the generality of the
foregoing, words such as �may,� �will,� �expect,� �believe,�
�anticipate,� �intend,� �could,� �estimate,� or �continue,� or the
negative or other variations thereof or comparable terminology, are
intended to identify forward-looking statements. The risks and
uncertainties inherent in such statements may cause actual future
events or results to differ materially and adversely from those
described in the forward-looking statements. Specifically, there
can be no assurance that the parties will complete a strategic
transaction on favorable terms or at all. Important factors that
may cause a difference between projected and actual results for AZL
are discussed in AZL�s filings from time to time with the SEC,
including but not limited to AZL�s annual reports on Form 10-KSB,
subsequent quarterly filings on Form 10-QSB and current reports on
Form 8-K. AZL and The Shidler Group disclaim any obligation to
revise or update any forward-looking statements that may be made
from time to time by any of them or on their behalf. Arizona Land
Income Corporation (AMEX: AZL), a real estate investment trust, and
The Shidler Group, a national real estate investment firm,
www.shidler.com, today announced that they have entered into a
definitive agreement whereby AZL will acquire the West Coast office
portfolio of The Shidler Group, and reincorporate in Maryland under
the name Pacific Office Properties Trust, Inc. ("Pacific Office
Properties"). Pursuant to the agreement, the ownership interests in
ten Class A office properties controlled by affiliates of The
Shidler Group, located in Honolulu, San Diego and Phoenix, will be
contributed to an umbrella partnership ("UPREIT") to be formed by
AZL. Reincorporated as Pacific Office Properties, the Company will
be externally managed by an affiliate of The Shidler Group. The
transaction has been approved by AZL's Board of Directors and is
subject to approval by AZL's shareholders. The transaction is
expected to close in January 2007. The major benefits of the
transaction are as follows: -- Immediately transforms AZL into a
West Coast office REIT with a strong core portfolio. -- Adds Jay H.
Shidler, a recognized leader in successfully managing and growing
public REITs, as Chairman of the Board and interim Chief Executive
Officer. -- Adds the proven acquisition team and management systems
of The Shidler Group. -- Adds an external advisor management team
experienced in the acquisition, redevelopment and management of
office properties in the relevant West Coast markets. -- Provides
greater access to the capital markets for debt and equity. Under
the terms of the agreement, the UPREIT will become the owner of the
contributed properties, comprising 2.8 million square feet of
office space, in exchange for limited partnership interests in the
UPREIT. Although AZL's common stock will remain outstanding, the
UPREIT will issue common and preferred partnership interests, which
will be exchangeable in the future for shares of AZL common stock.
Prior to the closing of the transaction, it is expected that AZL
will declare and pay a special dividend of $1.00 per share of its
common stock. The transaction is valued at approximately $570
million. Thomas Hislop, CEO and Chairman of AZL, stated, "We are
extremely pleased to enter into this important transaction with The
Shidler Group. We believe that this transaction is in the best
interests of our shareholders, and is superior to the various other
strategic opportunities that we have considered over the past
several years. The transaction announced today is the culmination
of an exhaustive process that our company and its advisors have
conducted during the past two years, and the benefits to our
shareholders, both immediate and long-term, represent an exciting
end product of our search for strategic alternatives. The Shidler
Group is a proven performer in terms of public REIT operation and
creating growth in shareholder value, and we are delighted at the
prospects of becoming associated with them." Jay Shidler, managing
principal of Pacific Office Properties and founder of The Shidler
Group, stated, "We are extremely enthusiastic about the opportunity
to take our high-quality West Coast office portfolio into the
public arena through this collaboration with AZL and Tom Hislop. We
intend to do everything that we can to nurture, expand and optimize
the value of the company, in an effort to maximize shareholder
value for all of the existing and future shareholders in AZL and
Pacific Office Properties Trust." About Pacific Office Properties
Trust Pacific Office Properties Trust will be a real estate
investment trust which will acquire, own, and operate office
properties in the western U.S., focusing initially on the four
high-growth markets of Honolulu, San Diego, Los Angeles, and
Phoenix. The Company will focus on acquiring, with institutional
co-investors, "value-added" office buildings whose potential can be
maximized through improvements, repositioning, and superior leasing
and management. The Company will continue The Shidler Group's
highly successful institutional joint-venture operations, which
focus on acquiring opportunistic and value-added commercial real
estate in partnership with institutional co-investors. About
Arizona Land Income Corporation Arizona Land Income Corporation is
a real estate investment trust headquartered in Phoenix, Arizona.
It is externally advised by ALI Advisors, Inc. and currently has a
portfolio of real estate and other assets aggregating approximately
$7 million. About The Shidler Group The Shidler Group is a private
long-term investor in commercial real estate. Over the past 30
years, through its private and public affiliates, it has acquired,
owned and managed more than 2,000 properties containing over 150
million square feet of leaseable area. Currently, The Shidler
Group, through its affiliates, owns and manages commercial
properties in Honolulu, Los Angeles, San Diego and Phoenix, and
maintains offices in Honolulu, San Diego, Phoenix and New York. The
Shidler Group has founded three publicly traded real estate
investment trusts -- Corporate Office Properties Trust (NYSE: OFC),
First Industrial Realty Trust (NYSE: FR), and Tri Net Corporate
Realty Trust (formerly, NYSE: TRI, now part of iStar Financial
(NYSE: SFI)). The Shidler Group also founded Primus Guaranty, Ltd.
(NYSE: PRS), a Bermuda-based holding company whose primary
subsidiary, Primus Financial Products, is a $15 billion, AAA/Aaa
rated provider of credit default protection. Credit Suisse
Securities (USA) LLC is acting as financial advisor to The Shidler
Group, and Peacock, Hislop, Staley, & Given, Inc. is acting as
financial advisor to AZL. Barack Ferrazzano Kirschbaum Perlman
& Nagelberg LLP is serving as legal advisor to The Shidler
Group, and Bryan Cave LLP is serving as legal advisor to AZL.
Additional Information and Where to Find It This press release does
not constitute a solicitation for votes for the transaction. In
connection with the proposed transaction, AZL expects to file a
proxy statement regarding the proposed transaction with the
Securities and Exchange Commission. Shareholders are urged to read
the proxy statement, because it will contain important information
about AZL and the proposed transaction. At the appropriate time,
shareholders will be able to obtain a free copy of the definitive
proxy statement and other documents filed by AZL with the SEC at
the SEC's website at www.sec.gov. The definitive proxy statement
and other relevant documents will also be available, free of
charge, from AZL by directing such request to Ms. Deanna Barela at
(602) 952-6821 or dbarela@phsg.com. Shareholders are urged to read
the proxy statement and other relevant material when they become
available before making any voting decisions with respect to the
transaction. AZL and its respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from the shareholders of AZL in connection with the
transaction. Information about AZL and its directors and executive
officers, and their ownership of AZL common stock, is set forth in
the proxy statement for AZL's Annual Meeting of Shareholders, which
was filed with the SEC on November 14, 2005. Additional information
regarding the interests of those persons may be obtained by reading
the proxy statement when it becomes available. Certain Information
about Forward-Looking Statements Statements contained in this
release except for historical information are forward-looking
statements that are based on current expectations and involve risks
and uncertainties. Without limiting the generality of the
foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "intend," "could," "estimate," or "continue," or the
negative or other variations thereof or comparable terminology, are
intended to identify forward-looking statements. The risks and
uncertainties inherent in such statements may cause actual future
events or results to differ materially and adversely from those
described in the forward-looking statements. Specifically, there
can be no assurance that the parties will complete a strategic
transaction on favorable terms or at all. Important factors that
may cause a difference between projected and actual results for AZL
are discussed in AZL's filings from time to time with the SEC,
including but not limited to AZL's annual reports on Form 10-KSB,
subsequent quarterly filings on Form 10-QSB and current reports on
Form 8-K. AZL and The Shidler Group disclaim any obligation to
revise or update any forward-looking statements that may be made
from time to time by any of them or on their behalf.
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