Wednesday, September 16, 2009

Arizona has Chutzpah

The Daily Show last night featured the sale-leaseback deal that Arizona is trying to get for its capitol. Sales price of $735 million, lease payments of $60 million for 20 years, property reverts to state at end of the 20 years.

The IRR for the investor: 5.2 percent. Hmmm.


Uncle Billy, Mental Widget said...

What happens if they default???

Anonymous said...


Anonymous said...

It starts out okay, but after a decade or so inflation will make the interest a really bad deal. Plus investors have to take the risk that they won't pay, since they don't really own the building. Try kicking out the legislature to move paying renters in.

Highest CD Rates said...

This is impressive. Sounds good, only if there are no hidden clauses.
Bad Credit Motorcycle

Judge Glock said...

Since the state also gets property taxes on the now privately owned land, the IRR is slightly higher.

I know Arizona and its municipalities mainly survive off sales taxes, but it is a slight difference.

Otherwise its a straight inflation bet, and it looks like yet another sector of the government is betting it goes goes up.

David Barker said...

Are you sure there isn't a tax angle? I realize that the American Jobs Creation Act of 2004banned most SILO transactions with government entities, but the law is complicated, and Arizona might have found a way around it to give depreciation to investors.

Most of the capital would be 39 year property, but a cost segregation study might find a lot of shorter life 150% DB property. There is no capital gains tax at the end, since the property reverts back to the state. This could boost the IRR by a lot.

Anonymous said...


Anonymous said...

[b]new microsoft software, [url=]buying academic software[/url]
[url=]sell software source[/url] nero 6 serial number adobe acrobat 9 professional
macromedia player software [url=]nero 9 distributors[/url] design software to buy
[url=]purchase powerpoint software[/url] buy indesign software
[url=]cheap oem software[/url] free nero 6 serial number
photoshop software to buy [url=]microsoft discounted software[/url][/b]

Unknown said...

I just couldnt leave your website before saying that I really enjoyed the quality information you offer to your visitors... Arizona properties.

darrell moddy said...
This comment has been removed by the author.
darrell moddy said...
This comment has been removed by the author.
darrell moddy said...
This comment has been removed by the author.
Unknown said...

There are certainly a lot of details like that to take into consideration. That’s a great point to bring up.
Property management in Orlando

john said...

I am very much impressed to your site. I am here Thanks mp3

Anonymous said...

Nice post. I have been searching for articles about valves and actuators and your post really helps. Thanks a lot for posting this.
Buy Justin Bieber Silly Bandz