It acquires 98 branches, totaling 482,000 sf in North Carolina, from Plano, TX-based Prefco III LP. Prefco (Pitney Bowes Real Estate Financing Corp.) is an affiliate of Pitney Bowes Credit Corp. Prefco acquired the portfolio in 1987 from Charlotte, NC-based North Carolina National Bank, which later became NationsBank and then merged into Bank of America.

American Financial's acquisition cost was approximately $90 million, or about $187 per sf. Bank of America will lease 74 of the properties for 20 years on a triple-net lease basis. The 2004 contractual rent under the lease is approximately $7.5 million.

Of the other properties in the portfolio, seven will be leased back to Bank of America for varying terms, 14 are subleased with leases expiring in December 2008 and three are vacant. The facilities in the portfolio vary in size from 1,300 sf to 36,000 sf.

This transaction makes Bank of America American Financial's largest tenant. On July 1, one day after the REIT went public raising $804 million, it bought 158 Bank of America facilities, including the 50-story Bank of America building in Chicago, for nearly $770 million in a direct sale/leaseback deal with Bank of America.

The acquisition of Prefco's Bank of America branches comes on the heels of American Financial's purchase of 31 KeyBank branches in Ohio for $36.8 million, or about $239 per sf. The properties encompass 154,000 sf and are leased to Cleveland-based KeyBank on a bond net basis through November 2011.

The seller is Prefco Quatre, another Pitney Bowes affiliate, which acquired the portfolio in 1989. The properties range in size from 900 sf to 65,000 sf.

Instant Insights /

American Financial's Buying Spree Ratchets Up Another $127M

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