Equity Office Properties picked up 98 industrial properties totaling 10.1 million sf in the merger with Spieker, which expanded the larger REIT's West Coast presence last July. Equity Office Properties has since sold 19 properties for $213.4 million, or $52 per sf, with most of the assets involved located in California and Oregon.
If Equity Office Properties achieves the same price per square foot on the remaining industrial properties, it would result in a $315-million deal. Almost all of the properties are in AMB's back yard, with 47 in the Oakland/East Bay market and 28 in the San Jose area. According to Securities and Exchange Commission filings, they were 92.8% occupied at the end of the first quarter, generating nearly $52 million a year--$8.58 per sf--in annual rent.
However, Equity Office Properties declines to talk about the reported deal, at least for for now. "We do not talk about marketplace rumor," says spokesperson Terri Holt. "We have not announced a deal to dispose of the industrial assets. It's our policy as a public company not to speculate about deals under consideration or in negotiations or if there are any."
Vice president of investor relations Diane Morefield said a year ago the industrial portfolio was likely to be spun off in the "next six to 12 months."
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