LEWISVILLE, TX—City Office REIT has marked its entrance into Texas with the closing of its acquisition of Lake Vista Pointe here for a purchase price of $28.4 million. Dallas-based Frontier Equity, the seller, developed the 163,000-square-foot office property in 2007; it’s triple-net leased to Ally Financial Inc. through 2021.
Vancouver, British Columbia-based City Office says it expects the Lake Vista Pointe acquisition to generate an initial full-year cash net operating income yield of approximately 7.8% based on the purchase price with contractual annual rent escalations. The acquisition at 2911 Lake Vista Dr. was financed with an $18.5-million mortgage that has been fixed at a 4.28% interest rate for 10 years.
“The Dallas/Fort Worth market offers favorable economic trends for owners of office properties,” City Office CEO James Farrar said when the property went under contract in June. “It is forecasted by Moody’s Economy.com to rank first in both population and job growth between 2012 and 2017.”
Lewisville, in particular, is situated in the North Texas growth corridor, “and the population within a three-mile radius has increased by 25% since 2000,” Farrar adds. He notes that the REIT continues to review a strong pipeline of acquisition opportunities within our target markets and we remain focused on growing our portfolio and enhancing stockholder value.”
City Office REIT owns or has an interest in 2.1 million square feet of office properties across North America. Prior to the Lake Vista Pointe acquisition, it already owned properties in Colorado, Florida, Idaho and Pennsylvania.