The properties are: a 373,000-sf office building at 215 Freemont St. in San Francisco that is leased to Charles Schwab & Co.; a 256,000-sf commercial condo unit at 123 S. Broad St. in Philadelphia that is leased to Wachovia Bank; and operations centers in Meridian, ID, Louisville, KY and McLeansville, NC, which aggregate approximately 530,000 sf and are leased to Citicorp. AFRT will continue to manage the Philadelphia asset.

According to a statement by the locally based financial REIT, it will "be granted rights of first offer to reacquire all of the properties." AFRT principals declined to discuss the transaction prior to the company's Feb. 27 earnings conference call. Calls to Resnick were not returned by deadline. Resnick Development is a subsidiary of New York City-based Jack Resnick & Sons Inc., an owner, builder and manager of more than five million sf of commercial and residential assets.

At the close of this transaction, Resnick will reimburse approximately $16 million in loan defeasance and prepayment costs to AFRT, which the REIT says results in an implied cap rate of about 6.7% on the sale. AFRT anticipates a net gain of approximately $42.5 million.

In a statement, Dave Nettina, AFRT's CFO and chief real estate officer, suggests more such sales will take place. This sale, he says, "demonstrates the high degree of market appeal for long-term credit-leased properties and the opportunities available to American Financial to harvest shareholder value while creating reinvestment capital for future accretive acquisitions. We believe there is significant untapped value inherent in our assets." He adds that the sale "demonstrates the repositioning of the company's balance sheet and the ability to recycle capital we can redeploy into higher yielding assets for continued growth."