The price of the Cleveland building is $9.5 million or $59 per sf. National City Bank now occupies 96% of the property and will lease the remainder beginning in 2006. For this acquisition, the locally based financial specialty REIT obtained $6.5 million in 10-year secured financing at an all-in fixed rate of 5.31%. This purchase marks AFR's first relationship with National City Bank.

The price of the Las Vegas acquisition, which is expected to close by the end of this month, is $24.3 million or about $296.34 per sf. AFR expects to obtain approximately $17 million in 10-year secured debt at a fixed rate that will be determined prior to closing. The building is 97% occupied, primarily by an undisclosed major commercial bank.

According to Nicholas S. Schorsch, AFR's president and CEO, the company expects that the two properties, which aggregate 243,000 sf, will generate an unleveraged return of approximately 7.8% in 2006, its first full year of ownership, and an average unleveraged return of approximately 9% from 2006 through 2015. The two acquisitions, Schorsch says, "reflect the continued strength of our property pipeline."

The completed and pending acquisitions follow by three days the closing of AFR's permanent secured financing on 212 of the 249-property Bank of America portfolio it acquired in October 2004. That 15-year financing is for $304 million at an all-in fixed rate of approximately 5.96%. The loan bears interest at a floating rate of Libor plus two basis points through June 14 before reverting to the fixed rate for the remainder of the loan term. The lenders are affiliates of Deutsche Bank and Bear, Stearns & Co. Once this loan converts to the fixed rate, Schorsch said, 97% of AFR's debt will bear interest at a fixed rate.