X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

SACRAMENTO-KBS REIT last week closed on an 80,000-sf office building here that is 100% leased to the State of California’s Employment Development Department. The Newport Beach-based trust paid $15.75 million (exclusive of closing costs) for the asset.

Completed in 1992, the two-story building sits on five acres at 9815 Goethe Rd. The California EDD lease runs through mid-2014 but may be cancelled by the state with 60 days notice beginning in early 2011. The current aggregate annual base rent payable under the lease is approximately $1.7 million.

The acquisition was funded with proceeds from KBS REIT’s ongoing public offering. KBS REIT says it may place mortgage debt on the property at a later date. The seller was listed as Evergreen/Bradville II. “We do not intend to make significant renovations or improvements to the [building],” the company says in an SEC filing.

The acquisition is the REIT’s third in Northern California this year. In February, it paid approximately $51 million plus closing costs for 625 Second St., a 134,847-sf (net rentable) historic building in the SoMa (South of Market St.) submarket of Downtown San Francisco. Fully renovated in 1999, the circa 1906 property is 100% leased through 2009 to LookSmart Ltd., an online media and technology company that has subleased portions of the building to third parties.

The average annual rental rate over the remaining lease term is $2.92 per sf per month, according to an SEC filing regarding the transaction. The 2007 aggregate annual base rent is $4.76 million. It rises to $4.82 million in 2008 and then drops to $4.48 in the final year. LookSmart, which directly pays the utility and janitorial costs, and reimburses for all other operational expenses, has two five-year renewal options for the four-story brick-and-timber building.

Earlier this month, KBS REIT paid $49.9 million for the Bridgeway Technology Center, a 187,268-sf, two-building R&D office campus in the East Bay city of Newark. Built in 1996 on 13 acres at 7151 Gateway Blvd., the project is 100% leased to two tenants–GE Homeland Protection Inc. and Risk Management Solutions Inc.–whose combined base annual rent is $4 million and whose weighted average remaining lease term is 3.2 years, according to SEC filings.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.