2006-01-01 Westlake's Major Real Estate Deals in 2005

An interview with Gary Wong, Co-President Westlake Global Management

What were the major transactions Westlake was involved in for 2005?

  • Sale of San Mateo Bridgepointe Shopping Center to SPI Holdings, LLC.
  • Sale of senior living business
  • We did a number of other financings, but those are estate related matters.

Why did we undergo these transactions?

  • We had a signification concentration of real estate assets in Northern California and we have had an on-going program to diversify the real estate portfolio.
  • We made the strategic decision to exit from the senior living business because we were not growing the business and were increasingly competing against other operators which had greater resources and a significant larger number of communities in which to spread their costs.

When did the major transactions take place?

  • Bridgepointe sale closed on November 2, 2005
  • Senior living sale will close on December 30, 2005.

Who were the partners involved?
There were no partners involved.

What was the transacted dollar amount, total
The sale of both properties was over $200 million.

What are the transactions' impacts on our corporate strategy?

  • The senior living business is an operationally intensive business. When coupled with the fact that the community is comprised of seniors, hospitality and professional execution of policies and procedures is critical to be successful and to avoid potential liabilities (falls, incorrect dispensing of medication, accidents, etc.) The company preferred to be involved in property management businesses vs operations which are also a reason why the company exited the grocery business, Lido Supermarket. The sale of the properties enables to take the proceeds and reinvest in other geographic markets, thereby diversifying the portfolio.
  • Going forward, the real estate businesses Westlake will be involved with are:
    • Property management – Fee bases services for commercial and residential property management;
    • Property development – Westlake will develop existing land parcels in the portfolio as well as redevelop existing properties for its highest and best use;
    • Asset management and Real Estate Advisory – Westlake will provide services regarding property acquisitions, disposition, repositioning, tax and financial advisory services.