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MILWAUKEE-Wells Real Estate Investment Trust Two, a subsidiary of Wells Real Estate Funds, has purchased a 230,000-sf office building here in the Park Place Office Park. Washington Mutual sold the building, fully leased by financials firm Wells Fargo, for less than $34.5 million.

The boomerang-shaped complex, a three-story building at 11200 W. Parkland Ave., was built in 1990 and recently renovated. The tenant is in the building until 2016. Peter Mitchell, SVP of acquisitions for the REIT, says Wells Fargo, with a credit rating of “AAA,” is a great tenant to have. “It’s a good back-office location, with good access to public transportation,” Mitchell says. “The tenant has occupied the building in one form or another since it opened, and the park is 86% leased,” with tenants that include Mutual of Omaha and Wausau Insurance, he says.

He says he cannot provide the lease rate that the tenant is paying, but says it’s “below market rents.” Average lease rates are at about $16 per sf for Milwaukee, according to a report by Marcus & Millichap, though this office park is at the northwest outer end of the city limits. Mitchell says the price paid for the property was less than the replacement costs, which he estimates at $150 per sf.

The public non-traded REIT specializes in office properties, and now has 73 buildings in 23 states and Washington, DC, totaling more than $4 billion in assets and covering 17 million sf. Across the portfolio, the REIT’s properties are 98% leased.

Mitchell says this is the first property in Wisconsin. The REIT is buying properties across the country, and has paid attention to the Midwest recently, with the recent sale-leaseback of a 188,500-sf office building in the Riverport Business Park in Maryland Heights, MO. The trust also paid $138.5 million, plus closing costs, in a sale-leaseback for CH2M Hill Cos.’ five-building, 478,000-sf headquarters complex in Englewood, CO late last year. “We’re still in the building stages of the portfolio,” Mitchell says.

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