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Manulife US Reit completes acquisition of California office tower

MANULIFE US Real Estate Investment Trust (Manulife US Reit) on Wednesday morning said it has completed its purchase of a Class A office building in Sacramento, California.

The pure-play US office Reit had announced the US$198.8 million acquisition of 400 Capitol Mall in September.

Located in Sacramento's central business district, the freehold 29-storey property has a net lettable area of 500,662 sq ft. It also has an occupancy rate of 94.9 per cent with 44 tenants, and a weighted average lease expiry of 5.9 years, the Reit said in September.

From the equity fund raising, US$136 million or 95.3 per cent of gross proceeds were used to partially fund the acquisition, the manager said on Wednesday. The remaining US$6.7 million went into paying the fees and expenses related to the acquisition and the fundraising.

Manulife US Reit’s preferential offering to raise US$62.7 million had been about 47 per cent oversubscribed, with the new units listed on Oct 18.

It also announced a private placement alongside the preferential offering, netting gross proceeds of US$142.7 million after both priced in at the top end of their issue price range. The private placement raised about US$80 million.

Manulife US Reit units ended flat at 91.5 US cents on Tuesday.