$303-Mil Deal Of Koger Non-Core Assets Done

AUSTIN-The sale of 39 buildings in Austin and San Antonio and properties in four other cities has closed between Koger Equity Inc., the seller, and buyer AP-Knight, LP, an affiliate of New York-based Apollo Real Estate Investment Fund. AP-Knight is paying $303 million, which included $207 million cash and the exchange of AREIF’s 5.73 million shares of Boca Raton, FL-based Koger Equity common stock.

Koger also will receive a membership interest in an AREIF subsidiary, which will provide Koger with a 20% participation in the net cash flow from the disposed assets after AREIF receives a 15% internal rate of return on its equity investment.

Koger will use the net cash from the sale to pay for strategic investment opportunities in high growth markets, repay debt and fund a one-time special gain distribution to Koger shareholders.

Koger executives termed as non-core assets the 10 properties with 75 suburban office buildings and one retail center, a total of 3.9 million sf, in the Texas cities and in Greensboro and Charlotte, NC, Greenville, SC and Birmingham, AL. Koger will continue to manage and lease the Austin and San Antonio properties.

The Koger Center in Austin’s north central submarket has 12 buildings with 441,170 sf and is 94% leased. The center was developed between 1973 and 1985. The San Antonio buildings are in two office centers. San Antonio West has 27 buildings with 1 million sf with an 83% occupancy rate. It was developed over a 30-year period, beginning in 1969. The San Antonio Airport project’s two buildings total 231,764 sf and are 97% leased. It was developed between 1982 and 1986.