CapLease Completes Debt Repurchase, Asset Sales

NEW YORK (AP) — CapLease Inc., a real estate investment trust, said Friday it repurchased an additional $10.3 million of debt, and sold two assets: a laboratory in Utah, and a long-term mortgage loan on a property in Massachusetts.

The asset sales will result in net proceeds to the company of $42.3 million, New York-based CapLease said.

The debt repurchase involves $10.3 million of CapLease's $75 million in convertible senior notes for about $5.4 million in cash, plus accrued interest on the notes.

That move "reflects solid execution on our previously stated 2009 strategy of continuing to retire our own debt at significant discounts," said Paul McDowell, CapLease's chairman and chief executive.

The asset sales, he said, are intended to further reduce debt, McDowell said.

CapLease sold the the OSHA technological lab facility in Sandy, Utah to the U.S. government for about $21 million.

The company said it expects to record a loss related to the property sale of about $2.9 million against its first-quarter earnings, primarily resulting from the write-off of accrued rental income.

CapLease also sold the majority of a long-term mortgage loan on a property in Framingham, Mass., backed by a Lowe's Cos. lease, for net proceeds of about $21.3 million.

The company retained a residual interest in the loan. CapLease expects to record a sale-related loss of about $4.4 million against its first-quarter earnings.

Shares of CapLease rose 1 cent to $2.75 in afternoon trading.