Structure Tone Partners with Corporate Lease Properties to Fund Sale-Lease Back Programs for its Clients

Business Wire, Nov 06, 2009

NEW YORK -- International construction firm Structure Tone announced today that it has formed a venture with Corporate Lease Properties (CLP) to provide facility financing for clients seeking to finance real property assets off-balance sheet. Transactions can be structured in conjunction with new construction or as part of a sale-lease back on existing property where Structure Tone is providing renovation or tenant improvement services.

“Structure Tone has never had an affiliation with a finance group enabling us to offer our clients the additional service of capital access in conjunction with our basic business of building high quality corporate real estate,” said Brian Donaghy, Vice Chairman and leader of the company’s Strategic Initiatives Group. “Through this venture with CLP, we would like to offer our clients an alternative to using their own capital and to provide 100% financing for properties we build or purchase. If a company is credit-worthy, we can structure a leasing transaction through which the cost is amortized over 15-20 years, thereby matching our clients’ long-term assets with long-term capital.”

Structure Tone’s partner, Corporate Lease Properties, is an organization with principals who have been providing capital to finance corporate real estate for over 25 years. H. Cabot Lodge III is the managing partner in charge of the new initiative. Mr. Lodge ran the Credit Tenant Leasing business at iStar Financial, Inc. (NYSE: “SFI”) for six years and before that was executive vice president and managing director at W.P. Carey & Co., (NYSE: “WPC”), a large NY-based real estate investment bank specializing in corporate net lease financing. “Companies still need to build or acquire mission critical facilities to remain competitive,” commented Lodge, “and they would rather deploy capital in primary products or services not in an asset outside of the core business. They are also looking for ways to increase liquidity and build-to-suit or sale-lease back financing provides corporations with the longest-term capital available – next to equity – but without the dilutive effect of selling stock.”

On the buy side, Mr. Lodge has spent his career working with investors in credit-tenant leases – insurance companies, pension funds, public and private investors – that have a focus on the nexus between corporate credit and real estate, providing the cash-on-cash yields inherent in fixed income portfolios. For corporations seeking to lease-finance their real property, “it is typically off-balance sheet,” Lodge continued, “where lease obligations are often not capitalized and provide an attractive alternative to bonds, which typically carry stringent covenant provisions. One hundred percent lease financing also provides corporations with “optionality” at the end of the term, either to re-amortize occupancy costs in renewals or purchase the property back with then-available cash.”

With one of the strongest balance sheets in the construction business and with offices throughout the US, UK, Ireland and Asia, Structure Tone is uniquely positioned to provide certainty of execution and hands-on expertise to ensure its clients’ needs are being met. Notes Robert Mullen, chief executive officer at Structure Tone, “We view this association with CLP to be of strategic importance in meeting the challenging needs of our clients. Our basic business is building but we also recognize that offering financing alternatives can make a difference for our customers.”

Structure Tone Inc.

Over almost four decades, the Structure Tone organization has become a preeminent full-service construction services provider in the US, UK, Ireland and Asia. Structure Tone offers a complete scope of services ranging from site selection analysis to design constructability review, from corporate interior fit-out to new out-of-the-ground construction, and from aesthetic enhancements to major building infrastructure upgrades and modernizations.

As a start-to-finish single source for all corporate construction requirements, Structure Tone streamlines client team’s efforts and maximizes efficiencies. Utilizing comprehensive in-house capabilities of over 1,200 construction professionals and state-of-the-art systems, Structure Tone provides a broad range of preconstruction and construction services to assist corporations, governments, educational institutions and not-for-profit organizations from the earliest project stages through close-out and commissioning.

The Structure Tone organization includes Constructors & Associates, Pavarini Construction Co., Inc., Pavarini McGovern and S&techs.