Company's Responsiveness Enables Mid-Atlantic Petroleum Properties of Wash.,
D.C. to Refinance One of Their Six Gas Stations and Restructure $3.25 Million
In Debt Before Deadline
WASHINGTON, Feb. 1 /PRNewswire/ -- Last year, the owners of a fast-growing
chain of gas stations in Wash., D.C. were recently confronted with an
increasingly common concern: they wondered whether their local bank would
allow them to refinance one of their properties on acceptable terms in order
to restructure a significant amount of debt coming due. Enter Petroleum
Realty Investment Partners, L.P., the country's premier one-stop finance
provider of choice to the independent retail gas station and petroleum-related
property sector. The result? -- another classic Petroleum Realty success
story.
Carlos Horcasitas and May-May Au Huie, principals of Mid-Atlantic
Petroleum Properties, first came to the Virginia offices of Petroleum Realty
in August 1999. MAPP is a fast growing Chevron jobber in the Wash., D.C.
metropolitan area. They needed to refinance one of their six properties in
order to restructure debt. MAPP had traditionally done most of its
refinancing through their local bank. They began to worry that they might not
be able to go back to their bank due to its concentration limits on customers.
MAPP's owners learned of the Petroleum Realty Investment Partners (PRIP)
alliance with Lehman Brothers and the fact that they could accomplish their
objectives through PRIP's securitized program. A long term, fixed rate
program with extremely competitive rates and no personal guarantee was
arranged for MAPP.
Even though the site that was being refinanced was one of the most
successful in the area, Carlos Horcasitas was certainly happy to have a non-
recourse loan. He said: "I don't think anyone goes into a deal expecting to
fail, but sometimes there are outside forces that can cause a business to
suffer. Knowing that we did not have to sign a personal guaranty was a huge
weight off our shoulders. This was something our bank could not compete
with."
MAPP needed to move very quickly on their deal and was concerned that
whoever financed the deal wouldn't be able to complete the transaction in
time. Knowing of the time constraint, PRIP put it in high gear. Working with
Lehman Brothers to ensure a smooth process, the underwriting began and the
wheels started turning.
"Even with all the normal hitches and snags that come up during these
types of transactions, the representatives from PRIP worked diligently to
ensure everything ran smoothly," Carlos observed. "PRIP representatives from
top to bottom made promises and delivered on them over and over."
On October 15, PRIP closed a debt restructure with MAPP for $3.25 million
that enabled MAPP to pay off their debt before the deadline. MAPP is
continuing to expand their high quality operation with PRIP's assistance using
securitized debt and sale-leaseback financing. Noted Carlos, "I now know that
whenever I need cash to make a deal, I don't have to worry because I know that
PRIP will be my partner for all future growth."
David J. Glimcher, Chairman and CEO of PRIP, commented: "MAPP's experience
really validates our strategic vision. Independent gas station owners have
historically sought financing through local banks, who often do a poor job of
serving the unique needs of this market. This restricts owners' ability to
maximize expansion opportunities, improve their return on invested capital,
and realize other benefits such as debt restructuring. Furthermore, in
situations where a sale/leaseback arrangement is called for, separating real
estate assets from business operations can enable an owner/operator to realize
a greater total market valuation for each asset individually, in turn
providing them with greater financial flexibility. At the end of the day,
leveraging the different financing options available through PRIP can mean a
difference of hundreds of thousands of dollars more in their pocket."
Michael D. Baskin, Senior Vice President -- Acquisitions and Operations
for PRIP, added: "We see a tremendous opportunity in being the first company
to focus exclusively on providing financing solutions to petroleum industry
jobbers, dealers and operators. This is in addition to a major consolidation
that is underway due to oil company mergers such as BP/Amoco, Exxon/Mobil and
Texaco/Shell. These newly combined entities are being forced to divest
significant numbers of gas station properties under U.S. antitrust provisions.
There are an estimated 175,000 independently owned gas stations, gas
station/convenience stores and other freestanding properties nationwide that
sell gasoline or oil including certain types of restaurants, car washes and
oil change centers. We believe 85 to 90 percent of these properties meet the
company's acquisition and/or financing criteria."
About Petroleum Realty Investment Partners
Petroleum Realty Investment Partners, L.P., which plans to go public
within 24 months, was co-founded in 1998. The Company seeks to become the
country's one-stop finance provider of choice to the independent retail gas
station and petroleum-related property sector, offering the following
services: 1) sale leaseback financing; 2) mortgage loan financing; 3)
equipment financing; and 4) third party construction loan services.
Petroleum Realty has entered into a joint venture agreement with Lehman
Brothers which has provided a $300 million credit facility to purchase gas
stations, convenience stores and related entities. Mortgage financing will be
originated through Lehman while equipment financing and construction loans
will be provided through third parties. Petroleum Realty will provide loan
originations through Lehman as a separate program.
Petroleum Realty's goal is to acquire and/or finance a majority of the
estimated 175,000 independently owned gas stations, gas station/convenience
stores and other freestanding properties nationwide that sell gasoline or oil
including certain types of restaurants, car washes and oil change centers.
Management estimates that 85 to 90 percent of these properties will meet its
acquisition and/or financing criteria.
Petroleum Realty's main offices are located in Tysons Corner, Virginia;
Columbus, Ohio; and Miami, Florida; with additional regional offices in major
markets across the country.
For more information, contact Dana Rossi, in Petroleum Realty's
Virginia/Washington, D.C. office, at 703-714-8888.
Visit the Petroleum Realty website at: http://www.petroleumrealty.com .
SOURCE Petroleum Realty Investment Partners, L.P.
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Related links:
http: /www.petroleumrealty.com
CONTACT:
Virginia-D.C. Office, Michael D. Baskin,
Sr.V.P. - Acqs. & Ops., 703-714-8888, Florida Office, Stephen H.
Bittel, President & COO, 305-536-1300, or Main HQ-Ohio Office,
David J. Glimcher, Chairman & CEO, 614-224-4777, all of Petroleum
Realty Investment Partners; or General Information, Paul
Scheeler, 312-640-6742, pscheele@frb.bsmg.com, or Media
Inquiries, Laura Kuhlmann, 312-266-2239, lkuhlmann@att.net, both
of The Financial Relations Board-BSMG
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