Keppel Pacific Oak US Reit buys Dallas property for US$101.5m
The office complex, One Twenty Five, is leased to 20 tenants and has occupancy rate of 95.5%
Singapore
KEPPEL Pacific Oak US Reit, previously known as Keppel-KBS US Reit, has agreed to acquire an office complex in Irving, Dallas from KBS SOR 125 John Carpenter for US$101.5 million.
One Twenty Five, which is made up of two class A buildings - 125 East John Carpenter and 5100 North O'Connor - is located in the submarket of Las Colinas, a key economic hub of North Central Texas with a high concentration of corporate headquarters in the US.
The property offers a total of 445,317 sq ft of space and has undergone extensive capital improvements and asset enhancements since 2015.
It has a committed occupancy of 95.5 per cent and is currently leased to 20 tenants from industries, mainly in the professional services, medical and healthcare, government, as well as financial and insurance sectors.
"Las Colinas has been experiencing strong leasing demand supported by limited supply of quality office spaces, as well as strong employment growth and population expansion," the Reit manager said.
"Las Colinas is also home to mixed-use developments, Gables Water Street and the Toyota Music Factory, and new multifamily housing projects, which have created a desirable urban live-work-play community in this attractive suburban submarket, and continues to attract a young, well-educated and affluent population."
Upon completion of the acquisition, expected to be in the fourth quarter, the pro-forma distribution per unit to unitholders would have grown by 1 per cent from 6.22 US cents to 6.28 US cents.
At the same time, the Reit's net leasable area will increase by 10.5 per cent to over 4.7 million sq ft of quality office space, with an improved portfolio committed occupancy rate of 94.2 per cent as at end-June 2019. Assets under management will expand by 9.3 per cent to about US$1.2 billion.
The manager plans to finance the acquisition with the proceeds from a private placement to institutional and other investors, debt financing and internal cash resources.
The proportion of debt and equity mix will be decided at a later date.
The acquisition is subject to unitholders' approval at an extraordinary general meeting.
Keppel Pacific units closed a cent higher at US$0.75 on Friday.
