Manulife US REIT enters deals to acquire 3 properties in Arizona and Oregon for around US$202M

Manulife US REIT entered a deal to acquire Park Place, an office campus consisting of two class A office buildings in Chandler, Phoenix, in November 2021. Credit: Manulife US REITManulife US REIT entered a deal to acquire Park Place, an office campus consisting of two class A office buildings in Chandler, Phoenix, in November 2021. Credit: Manulife US REIT

Manulife US REIT has entered deals to acquire three U.S. office properties — two near Phoenix, Arizona, and one near Portland, Oregon — for a total of around US$201.6 million, the REIT said in a filing to SGX Tuesday.

“Having built a high-quality portfolio of trophy/class A properties since IPO, the next phase of growth for MUST is the entry into high-growth sunbelt/magnet cities,” the REIT said in the statement.

“The acquisitions are in line with MUST’s post-Covid-19 themes and will enhance the current portfolio with higher occupancies, longer WALE [weighted average lease expiry] and growth tenants in the technology and healthcare sectors,” MUST said. “The properties are located in markets that will continue to capture in-migration not only of highly skilled talent pools but also a multitude of technology and healthcare corporates, further driving growth.”

The acquisitions will boost the REIT’s occupancy level to 91.3 percent from 90.9 percent as of end-September, the filing said.

In addition, as the in-place rents are below market, the acquisitions are expected to post positive rental reversions, MUST said.

The deal will be financed via a private placement of new units to raise around US$80 million and via loans, MUST said.

MUST estimated, on a pro forma basis, the acquisitions would have boosted distribution per unit (DPU) to 2.82 U.S. cents for the first half of this year, if completed on 1 January 2021, compared with the 2.70 U.S. cents posted for the period.

Diablo Technology Park

The Diablo Technology Park, located in Tempe, Arizona, near Phoenix, will be acquired from Tempe Diablo LLC for US$61.75 million, Manulife US REIT (MUST) said. The property is a five-building office campus is multi-tenanted and has creative, technology, education and healthcare tenants, the filing said.

An independent valuer valued Diablo Technology Park at US$65 million as of 9 November, the filing said.

Park Place

The Park Place property, located in Chandler, Arizona, will be acquired from CAZ 5 DE LLC for US$106 million, MUST said.

The campus has two class A office buildings, which were completed in 2019, and it is fully leased occupied by three major corporate credit tenants, Voya Financial’s subsidiary Voya Services, Toyota Motor’s subsidiary Toyota Motor Credit and Fresenius Medical Care’s subsidiary Fresenius Management Services, the filing said.

The independent valuer valued Park Place at US$106.9 million as of 9 November, the filing said.

Tannasboune Commerce Center

The Tanasbourne Commerce Center, located in Hillsboro, Oregon, will be acquired from Tanasbourne Property LLC for US$33.85 million, MUST said.

The property is a three-building office campus near Portland, with each building fully leased to a single major tenant, Nike, Kaiser Permanente and Tokyo Electron, the filing said.

The independent valuer valued Tanasbourne Commerce Center at US$34.4 million as of 1 November, the filing said.

Read more details about the properties.