NEW YORK — The bulk of the property that Santa Fe Southern Pacific will spin off to shareholders is located in California, the company said Wednesday.
The Chicago-based company, which owns 1.3 million acres of land in California and 1.1 million in other states, announced Tuesday that it will spin off real estate worth $300 million next year into a new real estate investment trust as part of a restructuring. Most of the stock in the trust will be distributed to shareholders as a special dividend, the company said.
A company spokeswoman, Susan Saltzer, said only developed and income-producing real estate will be included in the transaction and that it has not yet been determined which properties will be placed in the trust. Some land outside California is expected to be included.
Plans Surprise Some
Significant amounts of the company's developed property in California are in Orange and San Diego counties and in the San Francisco Bay Area, Saltzer said.
The property to be spun off will include industrial real estate such as office buildings, light industrial and manufacturing buildings, low-rise office buildings and warehouse and distribution facilities, she added.
Though the properties are owned by Santa Fe Southern Pacific, they are leased to others. "We just collect the rent," Saltzer said.
All told, at the end of 1986 the company owned 28,500 acres of developed land in 10 states, most of it in California. The buildings on that land contained 8.18 million square feet of floor space.
SFSP's plans to dispose of the real estate surprised some observers. "Before John Schmidt was relieved of his duties as (SFSP) chairman and chief executive officer last Easter Sunday," said railroad analyst Joseph B. Muldoon of the Philadelphia brokerage house of Janney Montgomery Scott Inc., "he said . . . more than 50% of the annual earnings came from real estate. You don't get rid of something that is so productive in terms of profits."