Australian Firm Puts $600M Portfolio on Market

WASHINGTON, DC-Record Realty Trust, the US subsidiary of an Australian firm, has put a 22-asset portfolio on the market. Valued at $600 million–a price that is based on a 7% cap rate of the portfolio’s NOI–the office properties are primarily occupied by government tenants. Jones Lang LaSalle’s John Kevill, Guy Ponticiello, Collins Ege, Suzanne Martinez and Sean McDermott are handling the sale.

JLL will begin receiving offers within the next several weeks, Ponticiello tells GlobeSt.com. The assets are spread across 14 states and the portfolio is 97% occupied. JLL has been in discussions with prospective bidders over the portfolio over the last several weeks–interested parties range the gamut from domestic and international private and institutional buyers. Indeed an international sale could well be the outcome, he adds. “The portfolio is owned by an international company and US government tenants are high value tenants.”

The properties are expected to sell as a complete portfolio, as there is $520-million in debt on the portfolio, which is cross-collateralized on the assets. The weighted-average interest rate on the senior debt at 6.15%, according to the portfolio’s marketing materials, and the weighted-average remaining senior term is approximately six years.

The portfolio includes nine headquarters locations, including the national headquarters of the Bureau of Public Debt in Parkersburg, WV, the Mississippi Valley Division Headquarters of the Army Corps of Engineers in Vicksburg, a regional headquarters of the EPA in Denver and a regional FBI headquarters in Pittsburgh.

The average remaining lease term on the portfolio is 9.5 years.Buildings in the portfolio are on average seven years old, with 14 of the 22 properties constructed or renovated since 2000. Many of the properties are LEED Gold certified.

Other cities in which office properties are located include Portland, OR; Bakersfield, CA; Riverside, CA; Lenexa, KS; Dallas; Harlingen,TX; Baton Rouge, LA; Charleston, SC; Kingsport, TN; Charleston,WV; Clarksburg, WV; Mineral Wells, WV, Martinsburg, WV; College Park, MD; Sterling, VA; and Buffalo, NY.