NuStar Energy sells North Side HQ for $103 million but

NuStar Energy has sold its North Side headquarters to Truist Financial Corp. for $103 million, but the oil pipeline and terminal operator is not moving.

The company will rent the real estate from an affiliate of Charlotte, N.C.,-based Truist in a transaction known as a sale-leaseback and use the proceeds to pay off outstanding debt.

“The proceeds from this transaction will strengthen our balance sheet and go toward our continued efforts to improve our financial strength and flexibility,” NuStar said in a statement. It will provide opportunities for future borrowing to repurchase its units or for other purposes.

NuStar will pay an average annual rent of $8.2 million during its initial 20-year lease, with two options to extend the term for 10 years each, according to a filing last month with the Securities and Exchange Commission.

RECORD HIGHS: San Antonio’s NuStar Energy posts best fourth quarter in its history

The company moved into its 319,000-square-foot headquarters off Interstate 10 north of The Rim shopping in 2012. It acquired about 37 acres there in 2010.

NuStar had a profit of $92 million in the three months through December — $75 million after adjustments for one-time items — and its Permian pipeline system handled record volumes of 584,000 barrels per day. Nustar said it expects full-year profits of $202 million to $240 million, compared with $222 million for all of 2022. It closed the year with debt of $3.3 billion.

It has been working to reduce debt and the lease-buyback enables it to make money from a non-earning asset, it said.

“In this climate of high interest rates and with some capital markets still not accessible to (master limited partnerships), this provides us with a less costly method of generating capital compared to other financing techniques and demonstrates our commitment to being good stewards of our resources,” NuStar said.

madison.iszler@express-news.net