Tuesday, March 12, 2013

Oaktree/NFR JV Buys $240 Million Office Portfolio

Oaktree Funds partnered with National Financial Realty to purchase a 40 office building, 3.44 million-square-foot portfolio for $240 million or $70 per square foot. KBS Real Estate Investment Trust was the seller. 

The assets include mission critical operations facilities and branch offices that are 90 percent occupied by Wells Fargo Bank on a long-term basis. They are located in eight states throughout the East and Southeast. 

NFR, a private investment firm based in Los Angeles, already owns Wells Fargo’s operation and data center in Hillsborough, OR. The new deal makes NFR one of the largest companies focused on owning and operating properties leased to regulated financial institutions. 

“Acquisition of this geographically diverse portfolio fits perfectly into NFR’s investment strategy to acquire excellent properties leased to leading financial institutions that offer reliable cash flow and significant potential for appreciation,” said Vincent E. Pellerito, president and CEO of NFR. 

The portfolio includes: 

  • eight buildings totaling 1.24 million square feet in North Carolina, five buildings that comprise 600,000 square feet in Pennsylvania,

  • three structures with 287,061 square feet in South Carolina,

  • eight properties totaling 529,898 square feet in Virginia,

  • three buildings comprising 419,863 square feet in Georgia,

  • eight structures with 141,677 square feet in Florida,

  • five properties totaling 189,937 square feet in New Jersey, and

  • one 26,540-square-foot structure in Maryland.

“This off-market acquisition, principally backed by 11 years of Wells Fargo credit at a 50 percent discount to replacement cost, is another example of Oaktree’s commitment to relationship based transactions with well-positioned strategic operating partners like NFR, in addition to lenders and borrowers in need of capital solutions,” said John Brady, managing director and head of global real estate for Oaktree. 

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