$10M Claims Five BofA Branches

The seller of record, Dallas-based Potomac Realty Ltd., is a single-purpose entity that's now poised for dissolution with the five-property sale in Arlington, Ennis, Hillsboro, Stephenville and Paris, says Steve Spencer, Potomac Realty manager. He says another sale--four assets held by a second single-purpose investment group--is slated to close in two weeks. "It's a good market," he tells GlobeSt.com, "and a good time to be selling."

The Jenkintown, PA-based buyer, American Financial, got a portfolio with an average of 8.5 years remaining on leases. Annual rent totals about $1 million, according to the REIT's press release.

Spencer says Potomac Realty acquired the BofA locations in October 1992 in a portfolio sale of Nations Bank branches. The just-sold locations are the 6,926-sf branch at 4220 W. Green Oaks Blvd. in Arlington; 13,289-sf branch at 301 W. Knox St. in Ennis; 12,009-sf branch at 100 E. Elm St. in Hillsboro; 10,532-sf branch at 115 N. Graham St. in Stephenville; and 8,226-sf branch at 1161 Clarksville St. in Paris.

"Bank of America knows us as a landlord and they were more than happy to continue that way," Muriel Lange, the REIT's investor relations director, says of the new purchase. The Arlington branch is the newest construction, sitting on a tract redeveloped last year with a CVS Pharmacy and a new bank building. The other structures are 1970s product or older.

Since the IPO launch in June 2003, American Financial has completed more than $1 billion of property acquisitions. Last July, the REIT bought eight million sf of BofA properties and then made its first Texas buy in September with a 15-property purchase. As of Dec. 31, 2003, the REIT owned or held leasehold interests in 220 office buildings and 358 bank branches, totaling about 17.2 million sf in 27 states and Washington, DC. Just days before the acquisition from Potomac Realty, the REIT paid $705.4 million for the one-million-sf State Street Financial Center in Boston.