Arizona Looking To Sell State Buildings
July 29, 2009
Call it a sign of desperate times: Legislators are considering selling the House and Senate buildings where they’ve conducted state business for more than 50 years.
Dozens of other state properties also may be sold as the state government faces its worst financial crisis in a generation, if not ever. The plan isn’t to liquidate state assets, though.
Instead, officials hope to sell the properties and then lease them back over several years before assuming ownership again. The complex financial transaction would allow government services to continue without interruption while giving the state a fast infusion of as much as $735 million, according to Capitol projections.
….and after the state is done selling off its assets, then what? It’s one thing to sell unused or underutilized assets, but the capitol buildings? Seems California isn’t the only crazy state in the Union.
[via azcentral]
Similar Posts:
- State of California Offloading Buildings To Fill Budget Shortfalls – What A Disaster
- Dimon: California Larger Risk Than Greece
- Citibank Forced to Resume Lending on Failed Mall Project
- Property Tax Appeals: The Impact on Government, Landlord, and Tenants
- Lawmaker Proposes Sale of San Quentin Prison
I think that is a brilliant idea. It is a win win. The investors get to see a good return, and it will free up a massive amount of cash for the state. This is a common practice in corporate america when a company needs cash for expansion or other needs. It is a great way to get an infusion of cash with out leveraging yourself.
A brilliant idea is to sale-leaseback a building that can be easily replaced, not the capitol buildings. What’s more is that the proceeds likely will be spent, not necessarily reinvested in something which creates a marginal return – after all, the state can probably borrow money less than what it can sell these buildings for, and that is further supported by the fact that the buyer of any such real estate will also have to consider what happens to it should the state move, not renew its lease, etc.
And lastly, don’t forget who these buildings belong to….the taxpayers.
Corporations are not the government and the government is not a corporation. The intertwining of the two are what has caused the mess we are in large part.
Is the State of Arizona considered a credit tenant at this point? Or would this be more of a Mom n’ Pop situation?
I’ll buy ‘em for a 12% cap on Y1 agreed to rents with 3% annual bumps. Let’s do this!