Tupperware Approves $87M Land Sale to O’Connor Capital

Tupperware is exiting the real estate business in a big way, entering into an $87 million sale contract with its longtime development partner, O’Connor Capital Partners, for all of its remaining land holdings in greater Orlando.

The board of directors of Tupperware Brands Corporation agreed to divest of the entire 740 acres and negotiate a lease-back agreement for its 61-acre corporate campus, which includes its world headquarters. The deal includes impact fee credits the company would have received for widening Orange Avenue.

All of the land, known as the Osceola Corporate Campus, was acquired by the Tupperware Corporation in 1953. The publicly traded company disclosed the contract last week in a SEC filing, noting that the closing is expected to take place before the end of the month. Tupperware Vice President Tom Roehlk told GrowthSpotter it’s likely the closings will occur over multiple transactions.

Tupperware agreed to sell all of its Orlando-area land holdings to O’Connor Capital Partners. The 485 acres in Osceola County are shown in red. The contract also includes 255 acres in Orange County, just south of the Gatorland amusement park.

“O’Connor is still in their due diligence period, so we won’t know for another couple of weeks or more it this is going to move forward,” he said. The initial 10-year leaseback terms for Tupperware’s eight building campus are still being negotiated, but Roehlk said the company would expect the contract to include multiple renewal options. “It’s a work in progress.”

Tupperware and O’Connor have a long history of working together to co-develop the company’s extensive land holdings in Osceola County. They joined forces to build the Crosslands Shopping Center and its sister project, Cinque Terre, across the street. They sold the centers in 2016 for $121 million.

“We’ve been in that market for 20 years, so we are familiar with it,” O’Connor development director Peter Bergner told GrowthSpotter.

They were also partnering as master developers for the mixed-use district adjacent to the Tupperware SunRail station. Roehlk said this contract replaces the previous one.

It excludes hotel pad that Tupperware sold in April to Park Square Enterprises for $1.57 million. Park Square Vice President Vishaal Gupta said the company plans to build a 140-room, dual-branded hotel with a Fairfield Inn and TownePlace Suites fronting on Osceola Parkway.

The 37-acre Transit-Oriented Development is approved for up to 1,700 multifamily residential units, 180,000 square feet of retail and 60,000 square feet of office space. Bergner said O’Connor is awaiting permit approvals for Phase 1 from Osceola County and hopes to break ground on the first 420 multifamily units and some retail by the end of the year.

He also told GrowthSpotter he expects to start building new offices sooner rather than later. “We believe there are users now who can be accommodated,” Bergner said. “Tupperware did a whole bunch of office parks by The LOOP. It’s an infill market, so we believe there’s plenty of demand.”

The bulk of the land, 485 acres, is in Osceola County; another 255 acres are in Orange County, including a 26-acre multifamily site on South Orange Avenue and a 16-acre site on Orange Blossom Trail area just south of Gatorland that could accommodate commercial or office development.

Roehlk said O’Connor had expressed an interest last year in buying all of Tupperware’s land holdings, including 500 acres of wetlands, but the offer was declined. Three months ago former Avon president Miguel Fernandez was named CEO.

“We’ve got new management, and they’re not interested in being in the real estate business,” Roehlk said. “They’re trying to raise cash, as well. They asked if we could accelerate this.”

Rich Goudis, a new executive vice chairman, outlined some details of the company’s turnaround plan in April but did not disclose the property sale at the time.

On May 26, the company also announced a tender offer to buy back up to $175 million of its outstanding 4.75% Senior Notes, which were due to mature next year. Approximately $600 million aggregate principal amount of Notes is currently outstanding.

“Strengthening our balance sheet is a critical objective for Tupperware and a top priority of the management team,” said Sandra Harris, Chief Financial Officer of Tupperware. “In recent months we have taken swift actions to accelerate cost savings and have increased our turnaround plan commitments in response to COVID-19 and in an effort to maintain compliance with our debt covenants from our recently amended credit agreement. We continue to work proactively with various financial sources and advisors to address our liquidity and cash flow needs ahead of the June 2021 Senior Notes maturity. The tender offer we are announcing today is our first important action in this regard.”

Source: https://www.growthspotter.com/2020/06/01/tupperware-approves-87m-land-sale-to-oconnor-capital/