Bangor & Aroostock Railroad

PROJECT DESCRIPTION

Optimize value of railroad property and crossing agreements

BACKGROUND

This 850-mile U.S. and Canadian operation requested assistance to sell off right-of-way and property leases to generate short-term cash.

In 2001, after decades of managing this diverse and wide-ranging set of property and crossing agreements, Bangor & Aroostock’s real estate agreements had grown beyond the company’s ability to update and manage their accuracy. The true value of these assets was unknown to the company itself; Bangor & Aroostock was therefore not able to make a clear presentation. These assets were subsequently “off the table” in negotiations to sell the railroad.

SRF APPROACH

Strategic Rail Finance evaluated every agreement in the railroad’s portfolio and reduced an outdated list of 3,000 line-items to an accurate count of 1,104. SRF updated the lease rates on all remaining agreements.

RESULTS

• Renewed appreciation for the long-term opportunity to develop the land adjacent to the right-of-way
• Identified ready-at-hand buyers for the long-term lease revenue streams
• Clarified legal and practical issues for closing an asset sale
• Identified the buyer of the railroad as having the most to gain from land ownership
• Land assets were sold at their highest value