NEWTON, MA-Select Income REIT, formed in December 2011 as a wholly owned subsidiary of CommonWealth REIT, on Friday reported normalized funds from operations of $83.2 million for the 12 months ended Dec. 31, 2012, compared to $80.1 million the year prior. The locally based REIT, which since its formation has had its single-tenant holdings mainly in Hawaii, has been stepping up its mainland acquisitions since the fourth quarter of last year.
In a conference call discussing fourth-quarter results, president and CEO David Blackman discussed the REIT’s investment strategy. It’s been driven by a secured income stream, “plans to operate with an investment-grade-like conservative capital structure,” internl growth prospects driven by the Hawaii portfolio and property acquisitions.
In terms of dollar value, the largest was a $105-million deal for a pair of office buildings at 16001 Dallas Pkwy. in Addison, TX. The properties, totaling approximately 553,799 rentable square feet, are net leased to Bank of America, acording to an SEC filing.
The deal, which closed in January, has been followed up by a pair of purchase agreements that haven’t been finalized. In one, the REIT agreed to pay $34.7 million for two single-tenant, net-leased office properties in Provo, UT with a combined 125,225 square feet. In the other, SIR entered an $18.6-million agreement to acquire a single-tenant, net-leased office property located in San Antonio, TX with 99,986 square feet.
During Q4, SIR executed $177 millionworth of acquisitions, buying seven properties totaling about 685,000 square feet. In the largest of the deals, the REITacquired three single tenant, net leased office properties located in Sterling, VA with a combined 337,228 square feet. The aggregate purchase price was $85.6 million, excluding closing costs. Even so, SIR’sholdings are in still mainly on the island of Oahu, where it has a portfolio of 17.8 million square feet comprised mainly of leasable industrial and comercial land.
Earlier this month, SIR increased the available borrowing amount under its revolving credit facility from $500 million to $750 million. All other terms and conditions of the revolving credit facility remain unchanged, according to a release.