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Trust Buys Old Building

May 21, 2004

IMPROSA Financial Group’s GibraltarReal Estate Investment Trust bought apiece of downtown San José historyrecently when it acquired Edificio Knöhr eHijos – a 90-year-old building that hastwice been declared a national landmark.The building is the eighth tobe acquired by the GibraltarFund since it was created December2002, and is its firstproperty in downtown San José.A real estate investmenttrust (REIT) is a publicly heldfund that buys and holds variouskinds of housing, retail orcommercial projects andobtains its income mainly fromrenting its properties.REITs work like publiccompanies – investors buyshares that entitle them to partof the fund’s assets, as well asdividends from profits generated(TT, Oct. 3, 2003).THE Knöhr building islocated on Ave. Central, Calle 1,in downtown San José. Twice ithas been named a historic landmark– first in 1988 by then-President Oscar Arias (1986-1990) and again in 2000 by then-PresidentMiguel Ángel Rodríguez (1998-2002).The building occupies 1,267 squaremeters of land and has 2,461 square metersof constructed area. It has six commercialtenants, including Tico fast-food restaurantRústico, discount retailer ImportadoraElizabeth, a Colombian bakery and amusic shop, among others.The acquisition, announced last week,is important for three main reasons,according to Jaime Ubilla, general managerof Improsa’s Investment Funds.FIRST, the Gibraltar Fund continuesits expansion by acquiring a new propertyvalued at approximately $4.08 million.This raises value of the fund’s propertiesto $21.26 million.Second, it marks an important step inthe fund’s diversification. It is Gibraltar’sfirst venture into commercial real estate forretail clients. Greaterdiversification makes thefund a more solid investment,he said.Third, it contributes toongoing efforts by the SanJosé Municipality to changethe city’s image andmake it an attractive placefor people to live and dobusiness, Ubilla said.He called the acquisitionof the Knöhr building“unique.”“REAL estate fundsusually buy new buildingsin trendy places,” heexplained. “There’s significantvalue in othersegments of the market,as this building shows.”“The Municipalitywould like to thank (thefund) for believing in anew wind, a new breath for San José,” hesaid.The Gibraltar fund has a total value of$20 million, divided into 4,000 shares of$5,000 each. The fund currently has 181investors who own 3,170 shares.Historically, the fund has generated12% a year in revenues. Last year, the fundpaid investors $650 in dividends per share– the highest dividends of any Costa RicanREIT, according to Ubilla.

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