(Save the dates: RealShare Apartments East comes to the Hyatt Regency in Miami, FL, on February 26, and RealShare Los Angeles comes to the Hyatt Regency Century Plaza in Los Angeles, CA, on March 27.)
EL SEGUNDO, CA-Locally based Griffin Capital Corp., on behalf of Griffin Capital Net Lease REIT Inc., has acquired a 157,000-square-foot class-A office building in Greenwood Village, CO, for $27 million. The property is 100% leased to Comcast Cable Holdings LLC, a wholly owned subsidiary of Comcast Corp., pursuant to a triple-net lease with an approximate nine-year remaining term.
The building is situated adjacent to the Denver Technological Center and was originally developed in 1980 and substantially renovated in 1998. Comcast is using the facility as its Western US technical support headquarters.
The extensive renovation features many specialized and above-standard improvements including redundant back-up power systems and HVAC equipment, as well as a five-level, 550-stall shared parking structure. The parking garage is located on an adjacent parcel that was sold separately and simultaneously with another office building. To ensure the right to use the parking facility in perpetuity, Griffin Capital negotiated and executed a reciprocal parking easement allowing for the use of approximately one-half of the stalls in the parking garage.
According to a prepared statement, Louis Sohn, Griffin Capital’s SVP of acquisitions, said, “Given the investment-grade credit quality of the tenant and substantial remaining lease duration, we are pleased to have acquired this asset at a favorable going-in capitalization rate of 8.06%. Further, with 3.3% average annual net rental-rate increases, the property is positioned to both continue to deliver superior returns and provide attractive NOI growth for the entire remaining duration of the lease.”
Michael Escalante, Griffin Capital’s CIO, added that the firm is pleased to complete its second acquisition in the Denver market with the Winn Richey team of Cushman & Wakefield in the past six months “and meet our objectives of acquiring solid real estate, located in a liquid market with a long-term lease to a high-quality tenant.”
With this acquisition, the Griffin Capital Net Lease REIT has a total capitalization approaching $400 million, Escalante said, and approximately 72% of its net operating income is derived from or guaranteed by investment-grade-rated entities. “This acquisition provides a great start to 2013 as we look toward building on the acquisition momentum we experienced in 2012.”
As GlobeSt.com previously reported, in early November the third panel during RealShare Net Lease West met in Los Angeles, titled “Investment Strategies for 2013,” and revealed that panelists’ core investment strategies were remaining relatively unchanged in the new year, even with the possibility at the time of a guard change in the White House and looming fiscal cliff issues. Moderator John Glass, SVP, investments, for Marcus & Millichap, asked the panelists whether they are looking at different markets and product types, and for the most part, the answer was no.
“We’re spending a lot of time finding out how the deal relates to our strategy,” said Escalante, who sat on the panel. “We’re only buying seven properties in 2012, so we have a selective acquisition strategy. We have a lot of balls in the air at any given time.” He added that there is creativity in terms of deal structuring and that at the time 70% of his firm’s properties were investment grade.