Friday, November 21, 2014

KBS REIT II Sells I-81 Industrial Portfolio for $105.7M

Chambers Street Properties acquired four industrial buildings in the I-81 / I-78 Corridor of Eastern Pennsylvania from KBS Real Estate Investment Trust II. The Newport Beach, CA-based REIT sold its I-81 Industrial Portfolio for $105.7 million, or about $64 per square foot.

The portfolio of core properties includes four industrial buildings totaling 1.64 million square feet that are fully leased to tenants including Kimberly-Clark, Amazon, Bimbo Bakeries, Two Chefs on a Roll, Cardinal Glass, and Haband Company.

The buyer, a Princeton, NJ-based REIT that focuses on long-term holds of net-leased industrial and office properties, was reportedly attracted to the asset's location, critical use, and tenant quality.

14-46 Alberigi Dr. in Jessup, PA is a 140,800-square-foot, high-bay warehouse built in 2007 on 106 acres in Lackawanna County. In Luzerne County are three bulk industrial buildings including the 615,600-square-foot distribution facility at 550 Oak Ridge Rd. constructed in 2005 on 50 acres in Hazleton, the 744,080-square-foot distribution building at 325 Centerpoint Blvd. in Jenkins Twp. built in 2008 on 49 acres, and 125 Capital Rd. in Pittston, a 144,000-square-foot food processing facility built in 2007 on 14 acres.

In connection with the sale, KBS repaid $56.2 million in outstanding principal on a portfolio mortgage loan secured in-part by the properties. KBS acquired the portfolio in 2011 for $90 million, and incurred expenses of $2.9 million during ownership.

"The I-81 / I-78 corridor has become highly sought-after by investors," commented Hines. "This market has a low vacancy rate, 8.4% for modern bulk, and tremendous leasing activity averaging 21.7 million square feet from 2011 to 2013, including a 41% year-over-year increase in 2013."

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