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OAKLAND, CA-A Prentiss Properties joint venture has acquired 1333 Broadway, a 238,394-sf office tower here for $39.4 million. The 10-story building is located next to the BART stop in the City Center submarket. Vacancy is 2%. Major tenants include Providian Bancorp, URS, Alameda County, Zions First National Bank, Gap and Citibank. The seller was not revealed by Prentiss, but the property is listed as one of the office assets of Lubert-Adler Real Estate Funds. Lubert-Adler acquired the building substantially vacant in May 2000, after which substantuial renovations were made to the roof, common areas and lobby, according to the Web site.The property was acquired by Prentiss Office Investors, Prentiss’ joint venture with Stichting Pensioenfonds ABP, a Netherlands-based pension fund. As a part of the transaction, the venture assumed a $25 million non-recourse mortgage with a 5.175% interest rate and a remaining five-year term. In addition, the JV has budgeted “a substantial capital investment during the first 2-3 years which should upgrade the property considerably,” according to a prepared statement by Prentiss.”This is a great opportunity to implement a well focused capital improvement program and make an average building in a superior location into a great property,” says Prentiss Northern California managing director Dan Cushing. The transaction was announced along with Prentiss’ second quarter results for its 18.8 million-sf portfolio. The company posted net income of $9.3 million, or $0.16 per common share, compared to net income of $18.8 million, or $0.37 per common share (diluted) for the second quarter of 2004. Adjusted FFO for the second quarter 2005 totaled $36.8 million, or $0.73 per common share, compared to $37.8 million, or $0.76 per common share, for the second quarter of 2004.As of June 30, the company’s overall portfolio–16.6 million sf of office properties and 2.2 million sf of industrial properties–was 89.5% leased versus 88.9% at the end of March and 90.6% this time last year. Just the company’s office portfolio was 89.1% as of the end of last month versus 88.4% at the end of the March of 2005 and 89.5% this time last year.During the quarter, Prentiss had 568,000 sf of lease expirations offset by 680,000 sf of renewals and new leases–462,000 sf in the office portfolio and 218,000 sf in the indutrial portfolio. Average straight-line net rents on new and renewed office leases were 9% below those on expiring leases. Average straight net rents on new and renewed industrial leases exceeded expiring rents by 12%.Lease expirations for office properties for the remainder of 2005 and calendar 2006 total 514,000 sf and 1,688,000 sf, respectively, which equates to 3% and 10% of the company’s net rentable office sf during those years.

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