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PITTSBURGH-Government Properties Trust, Inc. has completed its $28-million acquisition of the United States Federal Bureau of Investigation (FBI) Building in Pittsburgh for approximately $28 million. The building is fully leased to the General Services Administration under a modified gross lease that generates $3.2 million annually and expires in 2016. The 161,000-sf, three-year-old structure includes 87,000 sf of office space and 74,000 sf of parking. General Properties Trust president/CEO Thomas D. Peschio says the asset is its most significant in terms of gross annualized rent. The company also said Thursday it has taken a Veterans Administration building in Baton Rouge, LA, out of contract. The company had contracted to purchase the property for $6.8 million. According to Peschio, following thorough due diligence, the company decided that the transaction was not in the best interests of its shareholders and withdrew the contract. GPT, which invests in single tenant properties, went public in January, offering 16.8 million shares at $10 per share. Peschio says GPT currently is in negotiations on 31 properties representing over 4.3 million sf of leased space. The number of properties under negotiation is in a continual state of flux due to availability and the acquisition due diligence process. “Our top priority is to profitably deploy our shareholders’ funds by aggressively acquiring only high-quality properties that meet our acquisition and return on assets criteria,” says Peschio. In its regulatory filing with the SEC, the company said about $129 million of the estimated $159 million in net proceeds would be used to acquire eight GSA-leased properties totaling approximately 487,000 sf that have an average remaining lease term of 14 years. The new acquisitions will have a 75% loan-to-cost ratio, the company said. The company, which intends to be taxed as a REIT, said in its regulatory filings that there is substantial demand for new office space from the federal government. The US government now owns 77% of its space, but its new properties are more often being leased. Backing that up, the company says that between 2000 and 2002, commercial square footage owned by the government grew by only 0.2%, while square footage under lease agreements grew by 7.8%.

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