Keppel Pacific Oak US REIT to acquire Nashville, Denver properties for US$105.1M

Two office properties set to be acquired by Keppel Pacific Oak REIT. Credit: the REITTwo office properties set to be acquired by Keppel Pacific Oak REIT. Credit: the REIT

Keppel Pacific Oak US REIT plans to acquire two office buildings — Bridge Crossing in Nashville, Tennessee, and 105 Edgeview in Denver, Colorado — for a total of US$105.1 million from two unrelated sellers, the U.S.-focused REIT said in a filing to SGX Wednesday.

On a pro forma basis, the deal would have boosted distribution per unit for 2020 by 0.8 percent to 6.28 U.S. cents from 6.23 U.S. cents.

The deal, which is expected to be completed in the third quarter, will be financed with a proposed private placement to institutional and other investors, and with debt financing.

The Bridge Crossing property, which will be acquired for US$46 million, and the Denver property, which will be acquired for US$59.1 million, are both fully leased to tenants, mainly in the technology sector, KORE said.

KORE pointed to the two cities as among the “boomtowns” for younger talent in the U.S.

“KORE’s focus of investing in key growth markets driven by technology and innovation has been a cornerstone of our strategy since our listing. Nashville and Denver are key growth markets with positive economic and office fundamentals, as well as significant tech investments,” David Snyder, CEO and chief investment officer of the REIT’s manager, said in the statement.

“Top companies from different sectors have set up their headquarters or regional offices in these growth markets, especially tech companies in recent years, drawn by factors including the availability of a young and highly-educated workforce, a business-friendly environment, as well as proximity to various retail, dining and lifestyle amenities,” Snyder added.

 

The Nashville property is a newly refurbished three-storey building, with two tenants: Fleetcor Group’s Comdata is an anchor tenant with 93.2 percent of the net lettable area, with the remainder taken by technology consultant Cognizant.

The Denver property, a four-storey building located in Interlocken Advanced Technology Environment, a technology park, has eight tenants, with Gogo Business Aviation, a provider of broadband service in aviation, as an anchor tenant taking the majority of the building.

Once the deal is completed, KORE’s portfolio will hold 15 office buildings and business campuses in nine markets.