KBS Real Estate Investment Trust III has kicked off summer with its largest purchase of the year. The REIT just completed the $269 million acquisition of a 1 million-square-foot group of three office properties in Dallas and suburban Washington, D.C., known as the National Office Portfolio from CBRE Global Investors.
As premier assets in strong markets, the properties–Preston Commons and Sterling Plaza in Dallas and One Washingtonian in Gaithersburg, Md.–fit KBS REIT III’s acquisition profile like hand in glove, but snapping up such assets in the current climate is no simple feat.
“The acquisition market is very competitive with a great deal of institutional investors chasing real estate investments,” Rodney Richerson, regional president with KBS Realty Advisors, KBS REIT III’s external advisor, told Commercial Property Executive.
With the purchase of Preston Commons and Sterling Plaza, KBS REIT III added a respective 427,800 and 313,600 square feet to its presence in Dallas. And by grabbing the 321,000-square-foot One Washingtonian Center, the REIT made its entrée into the State of Maryland. All told, the National Office Portfolio is 87 percent leased.
KBS REIT III financed the purchase with proceeds from a four-year, $170.8 million mortgage loan through Bank of America N.A. Approximately $8.8 million of the funds will be disbursed to support tenant and capital improvements and leasing commissions.