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Indiana Toll Road Leases for $3.7B to European Consortium
April 14, 2006
By Russ Colchamiro, Executive Editor
Infrastructure assets have not yet permeated the collective consciousness of commercial real estate investors, but the recent $3.8 billion lease signed yesterday for the Indiana Toll Road may change all that.
In what is being called the largest highway privatization deal in U.S. history, and in a transaction that’s already raising the ire of many Americans, the Indiana government approved the controversial deal yesterday, agreeing to lease the 157-mile Indiana Toll Road for 75 years to Spanish-Australian consortium Cintra-Macquarie.
According to reports, the deal calls for the consortium to pay the state of Indiana the full amount up front and to be responsible for operating and maintaining the highway. In exchange, the consortium would keep all toll revenue it collects. The transaction is expected to close by the end of June.
"This is a sign that European investors are interested in infrastructure assets in the U.S.," Felicity Gates, managing director & chief investment officer of infrastructure and investments for RREEF, told CPN. Chicago was the first U.S. government entity to lease an existing toll road to private investors, when it leased the 7.8-mile Chicago Skyway last year to the same consortium for 99 years for $1.8 billion. And California State Treasurer Phil Angelides recently proposed that CalPERS and CalSTRS invest $15 billion in urban, smart growth infrastructure projects in California.
Currently, the most active U.S. investors in infrastructure assets are pension funds and insurance companies.
Assets that fall under the infrastructure heading include, but are not limited to, toll roads, electricity and water treatment plants, airports, hospitals and police stations. Infrastructure assets are considered stable, long-term investments, as they generate revenue and are necessary for communities, and as such are backed by government funds or receive other funds for upkeep.
Indiana Toll Road Leases for $3.7B to European Consortium
April 14, 2006
By Russ Colchamiro, Executive Editor
Infrastructure assets have not yet permeated the collective consciousness of commercial real estate investors, but the recent $3.8 billion lease signed yesterday for the Indiana Toll Road may change all that.
In what is being called the largest highway privatization deal in U.S. history, and in a transaction that’s already raising the ire of many Americans, the Indiana government approved the controversial deal yesterday, agreeing to lease the 157-mile Indiana Toll Road for 75 years to Spanish-Australian consortium Cintra-Macquarie.
According to reports, the deal calls for the consortium to pay the state of Indiana the full amount up front and to be responsible for operating and maintaining the highway. In exchange, the consortium would keep all toll revenue it collects. The transaction is expected to close by the end of June.
"This is a sign that European investors are interested in infrastructure assets in the U.S.," Felicity Gates, managing director & chief investment officer of infrastructure and investments for RREEF, told CPN. Chicago was the first U.S. government entity to lease an existing toll road to private investors, when it leased the 7.8-mile Chicago Skyway last year to the same consortium for 99 years for $1.8 billion. And California State Treasurer Phil Angelides recently proposed that CalPERS and CalSTRS invest $15 billion in urban, smart growth infrastructure projects in California.
Currently, the most active U.S. investors in infrastructure assets are pension funds and insurance companies.
Assets that fall under the infrastructure heading include, but are not limited to, toll roads, electricity and water treatment plants, airports, hospitals and police stations. Infrastructure assets are considered stable, long-term investments, as they generate revenue and are necessary for communities, and as such are backed by government funds or receive other funds for upkeep.
posted by Jones Lang LaSalle NJ News Blog at 1:41 PM
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