Completed in 1992, the two-story building sits on five acres at9815 Goethe Rd. The California EDD lease runs through mid-2014 butmay be cancelled by the state with 60 days notice beginning inearly 2011. The current aggregate annual base rent payable underthe lease is approximately $1.7 million.

The acquisition was funded with proceeds from KBS REIT's ongoingpublic offering. KBS REIT says it may place mortgage debt on theproperty at a later date. The seller was listed asEvergreen/Bradville II. "We do not intend to make significantrenovations or improvements to the [building]," the company says inan SEC filing.

The acquisition is the REIT's third in Northern California thisyear. InFebruary, it paid approximately $51 million plus closingcosts for 625 Second St., a 134,847-sf (net rentable) historicbuilding in the SoMa (South of Market St.) submarket of DowntownSan Francisco. Fully renovated in 1999, the circa 1906 property is100% leased through 2009 to LookSmart Ltd., an online media andtechnology company that has subleased portions of the building tothird parties.