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After Challenging Year, CHS Sells HQ in $55M Sale-Leaseback Deal

Company is Taking "Strong and Decisive" Measures to Pay Down Debt
March 2, 2018
Agribusiness and energy cooperative CHS Inc. has sold its Inver Grove Heights, MN headquarters to Atlanta, GA-based SunTrust Robinson Humphrey in a $55 million sale-leaseback deal.

The deal closed on Nov. 30, 2017, but was not made public until the certificate of real estate value was released on Wednesday.

CHS’s HQ at 5500 Cenex Dr. was built in 1981 and sits on a 23.8-acre lot. The six-story building has an area of 316,583 finished square feet and an estimated assessed value of $12.4 million for taxes payable in 2018, according to Dakota County property records.

SunTrust Robinson Humphrey (STRH) is the corporate banking branch of SunTrust Banks Inc., also of Atlanta. Executives with STRH did not respond to a request for comment.

CHS spokesperson Rebecca Lentz sent a short statement via email:
We’re not going anywhere. We are committed to the communities in which we live and work. Similar to many other companies, we decided to sell the building and lease the space back long-term as part of our overall capital and financial planning.

By CHS’ own account, 2017 was a challenging year for the company, which saw it struggling with low commodity and energy prices and the bankruptcy of one of its largest international partners. In April, Seara Alimentos of Brazil began restructuring proceedings, according to Reuters. Seara’s difficulties inflicted a $54.8 million hole on CHS, according to its annual report for 2017. About a month later, then-CEO Carl Casale was replaced by Jay Debertin.

At CHS’ annual shareholder meeting on Dec. 8, 2017, Timothy Skidmore, executive vice president and CFO said the company was taking "strong and decisive" measures to counter the Seara-related costs and other specific event-related charges over 2017 that amounted to $481 million in all.

"This is a high priority and we have unwavering focus. Restoring financial flexibility to CHS is our number-one financial priority and I am confident we are on the right path," Skidmore said, according to a transcript provided to the Securities and Exchange Commission.

He said that in 2018 CHS would conduct an asset review to see which could be monetized to pay down long-term debt and help the company regain financial flexibility.

Please see CoStar COMPS #4152420 for additional information on this transaction.

Clare Kennedy, Minneapolis / St. Paul Market Reporter  CoStar Group   
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