RESTON, VA—Atlanta-based Columbia Property Trust just announced it has sold 11 suburban and largely single-tenant office properties totaling 2.9 million-square feet for $433.3 million. Unfortunately for the local market, 881 Campus Commons here, and 800 N. Frederick Ave., in Frederick, MD, was not among them. The Reston office is projected to be completed later in the third quarter of 2015 and the suburban Maryland office project will deliver at the end of the year.
Columbia Property Trust put the portfolio on the market in March of this year.
The REIT acquired Campus Commons as part of the Spear Street portfolio trade in January, which also included 315 Park Avenue South Building in Manhattan, New York.
There was significant interest in the Reston and Frederick properties from both single-asset and portfolio buyers, according to CEO Nelson Mills. He also says, in his prepared statement, that he is confident these properties will clock in at the expected sales price just as the 11 properties that it did sell have.
The buyer of the portfolio is an unnamed private equity fund.
Columbia Property Trust had put these 11 assets on the market -- along with the local DC area properties and 263 Shuman Blvd. in suburban Chicago -- because its suburban and single-tenant holdings were not core to its long-term strategy. Instead the REIT has been shifting its portfolio toward multi-tenant properties in CBD locations with a meaningful presence in high-barrier markets, Mills says.
And indeed, the sale of the 11 assets allowed it to clean up its balance sheet by paying down debt on some CBD properties that it does own, including a $105 million loan secured by 100 East Pratt –- a lollapalooza of a property that encompasses 653,000-square-foot and consists of a 10-story building and 28-story tower. Last year, its anchor tenant T. Rowe Price renewed the 424,877 square feet it occupied there.
The 11 properties Columbia Property Trust sold are located in Boston, Chicago, North New Jersey and one building in Baltimore, located at 1580 West Nursery Rd.
When all is said and done and the three pending properties do sell, Mills expects total proceeds "to be within our expected range of $500 million to $600 million."
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