DALLAS-Behringer Harvard REIT 1 Inc., marking its largest single purchase in its two-year history, has just closed on the $96.5-million acquisition of a five-building office portfolio from a Minneapolis-led partnership. The fully leased, class A package spans Texas, Oregon and Southern California.
The Dallas-based REIT, which now owns more than $600 million in assets, acquired the Western Office Portfolio from Aptus Office Investments LLC. The holdings are located in Richardson, TX, Tigard, OR and Diamond Bar, CA. The portfolio's tenant roster is led by Allstate Insurance Co. Inc. of Northbrook, IL; UnitedHealthcare of Minneapolis; Goodrich Corp. of Charlotte, NC; and Alliance Data Systems Inc. of Dallas.
"We have significant lease term remaining," says M. Jason Mattox, Behringer Harvard's senior vice president. He tells GlobeSt.com that there is no roll in the predominately net-leased pacts for at least three years.
The lone Dallas asset is Alliance Data's headquarters, a 230,061-sf, 10-acre complex at 17655 and 17657 Waterview Parkway. The Diamond Bar component contains Gateway 12, a 71,739-sf office building on nine acres at 1550 Valley Vista Dr., leased to Goodrich, and the 55,095-sf Gateway 22 at 21810 E. Copley Dr. and 40,759-sf Gateway 23 at 21950 E. Copley Dr., an eight-acre asset with Allstate in the driver's seat. The portfolio's only multi-tenant building sits in a Portland suburb: the 88,335-sf Southwest Center on six acres at 7632 SW Durham Rd. Its lead tenants are Allstate and UnitedHealthcare.
Behringer Harvard hasn't been an active buyer of single-tenant properties. "While we like single-tenant, these buildings would lend themselves to multi-tenant at some point in time," says Jon Dooley, senior vice president of acquisitions. He credits the chase to the locations and "the creditworthiness of the tenants in the buildings." All structures were built in 1999 and 2000.
Dooley says yesterday's closing was made with a 10-year loan, bearing a 10-year amortization and "a very attractive" fixed-rate interest from JPMorgan Chase Bank in New York City. John Alvarado, senior vice president for Dallas-based Trammell Crow Co., Jeffrey Cole and Richard Putnam, both TCC principals in Irvine, CA, brokered the sale. According to SEC documents, Behringer Harvard went hard on the deal June 13 with $2 million in earnest money and rolled in another $2 million in early July. With the deal now put to bed, Dooley says the seller-managed portfolio has been placed into TCC's hands for management and leasing.
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