The properties--1102 Q Street and 7001A East Parkway--were either built or significantly renovated in the past seven years and are collectively 98.2% leased. Griffin Capital president Kevin Shields tells GlobeSt.com the vast majority of the space is leased to the State of California and County of Sacramento.
The 150,000-sf building at 1102 Q St. is three blocks south of the State Capitol in Sacramento's central business district and is leased by agencies of the State of California; the largest tenant is California Community Colleges. The 95,000-sf building at 7001A East Parkway is in South Sacramento, at the intersection of Hwy. 99 and Florin Road. That building is leased long-tem to the county's health and human services division.
"Our investors are generally risk averse and looking for stable assets, so these two properties match their investment preferences," Griffin Capital COO David Rupert tells GlobeSt.com. "California Community Colleges has been in the building since it was built and they have 300 different appropriation bills moving through the legislature, so proximity to the capital is critical. The county health and human services agency needs ample free parking and we are one of the few that can provide that."
To complete the transaction, Griffin Capital raised $21.275 million in equity from investors and JPMorgan Chase Bank NA provided $36 million (inclusive of reserves) of non-recourse, 10-year fixed-rate first mortgage debt. Griffin president Kevin Shields tells GlobeSt.com the anticipated hold is approximately equal to the term of the loan and that the expected IRR (including sale proceeds) is 10.5%.
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