Consumer electronics retailer RadioShack Corporation sold its Fort Worth, Texas Riverfront Campus headquarters to German-based KanAm Grund Kapitalanlagegesellschaft mbH, for its open-ended real estate fund KanAm grundinvest Fonds. The company also signed a 20-year lease with renewal options for an additional 20 years. KanAm was advised by Atlanta-based Westwind Capital Partners.
RadioShack will use the proceeds of the sale to repay short-term borrowing used to partially finance an overnight share repurchase transaction for 20 million shares. In August 2005, when the company announced its overnight share repurchase, it also announced its intent to find a viable real estate partner for a sale-lease back agreement.
"This financial transaction allows us to recoup our investment in the campus and redistribute capital to our shareholders," said David Barnes, senior vice president and chief financial officer for RadioShack Corporation. "We're pleased that we found a prestigious partner such as KanAm Grund, and we're looking forward to developing a long-term relationship with our new landlord. The terms of this sale provide us with the flexibility we need to expand our business for decades to come."
In 2004, RadioShack moved from the Tandy Center, a high-rise office environment, to a campus-style facility. The decision to relocate its headquarters was based on financial and cultural objectives. Barnes said the company wanted to reduce operating expenses while improving workplace efficiency and fostering a more collaborative corporate culture that encourages teamwork.
"The cost of operating our campus facility is less than operating the Tandy Center," said Barnes. "The sale of the campus enables us to enhance shareholder value and focus on our core business which is heavily driven by wireless. With our upcoming transition to Cingular Wireless, we will be partnering with the nation's largest wireless company. This new agreement, along with our other operating initiatives, gives us confidence in RadioShack's future business prospects."
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