KBS REIT III Buys Three-Property Office Portfolio for $269M
- Jun 21, 2013
KBS Real Estate Investment Trust III has kicked off summer with its largest purchase of the year. The REIT just completed the $269 million acquisition of a 1 million-square-foot group of three office properties in Dallas and suburban Washington, D.C., known as the National Office Portfolio from CBRE Global Investors.
As premier assets in strong markets, the properties–Preston Commons and Sterling Plaza in Dallas and One Washingtonian in Gaithersburg, Md.–fit KBS REIT III’s acquisition profile like hand in glove, but snapping up such assets in the current climate is no simple feat.
“The acquisition market is very competitive with a great deal of institutional investors chasing real estate investments,” Rodney Richerson, regional president with KBS Realty Advisors, KBS REIT III’s external advisor, told Commercial Property Executive.
With the purchase of Preston Commons and Sterling Plaza, KBS REIT III added a respective 427,800 and 313,600 square feet to its presence in Dallas. And by grabbing the 321,000-square-foot One Washingtonian Center, the REIT made its entrée into the State of Maryland. All told, the National Office Portfolio is 87 percent leased.
KBS REIT III financed the purchase with proceeds from a four-year, $170.8 million mortgage loan through Bank of America N.A. Approximately $8.8 million of the funds will be disbursed to support tenant and capital improvements and leasing commissions.
Despite the high number of investors clamoring for key office properties in key locations, KBS REIT III has done its share of buying in 2013. Earlier this year, it acquired the 364,400-square-foot Tower on Lake Carolyn in Irving, Texas, in the Dallas Fort Worth metroplex, and shelled out $118.1 million for the 678,000-square-foot RBC Plaza, a mixed-use office destination in downtown Minneapolis.
And the shopping spree isn’t over.
“We have a strong interest in primary gateway cities such as Chicago, Seattle and Los Angeles, as well as other top-tier office markets with the potential for significant job growth, including Austin, Houston, Nashville and Orange County, California, to name a few,” Richerson said.