December 30, 1995 – Willis Corroon Group PLC is closing out 1995 with the year’s largest transfer of non-distressed property in Nashville.
The London-based insurance broker and consultant sold its Century Boulevard office building yesterday for $ 52.4 million in cash. Acquiring the 4-year-old building is Shorenstein Realty Investors Two L.P., a partnership managed by The Shorenstein Co. of San Francisco.
Family-owned Shorenstein buys and manages commercial real estate, including numerous buildings in San Francisco, such as the Bank of America building, and other high-profile properties throughout the country, including the Metropolitan Life building on Park Avenue in New York and the Carillon Building in Charlotte, N.C.
Willis began testing the market for its North American headquarters building a year ago as one of a series of changes designed to better deploy the company’s assets. With 470,000 square feet of office space and a spacious conference center, Willis Corroon Plaza is one of the area’s largest office buildings.
“It’s a beautiful building, recently built to very high standards, with a commanding presence in the market,” said John Grassi, executive vice president of Shorenstein, in explaining why the partnership bought the building. “We think it will perform quite well over time.”
Completed at a cost estimated by local real estate experts at more than $ 60 million, the building had a depreciated value of $ 54.2 million as of a year ago. Analysts had expected the building to fetch about $ 50 million.
The Willis release described the financial result of the transaction in 1996 as “broadly neutral,” after adjusting for the loss of lease income to the company from current tenants and for a reduction in interest payable.
Richard Dalzell, group financial director for Willis, said yesterday: “With the completion of this transaction, we will be able to make another substantial reduction in our bank borrowings and ensure that we achieve our aim of a debt:equity ratio of below 50% at the year end.”
While Willis has committed to a 15-year lease for 57% of the office space, other major tenants there include CNA Insurance Co. and MagneTek Inc.
Willis Corroon American Depository Receipts bundles of Willis’ London-traded shares rose 50 cents yesterday, closing at $ 11.63.