American Financial Realty Acquires Office Property from Company Executives

WILMINGTON, DE-American Financial Realty Trust has acquired Three Beaver Valley Road, a 263,000-sf class A office building here for $51.7 million, including the assumption of $44.8 million in debt. Also part of the deal is a two-story parking garage that is under construction.

Exercising an 18-month-old option, the Jenkintown, PA-based REIT that went public in June acquired the property from First States Wilmington JV LP, an entity controlled by AFR president/CEO Nicholas Schorsch. Shelley Schorsch, AFR’s senior vice president of corporate affairs, and Jeffrey C. Kahn, SVP of acquisitions and development, also owned partnership interests in FSW.

American Financial acquires corporate owned real estate, primarily bank branches and office buildings, from financial institutions. It owns and manages these assets primarily under long-term triple net and bond net leases with banks. Last month, AFR acquired 98 bank branch properties totaling 479,419 sf from Prefco III LP for $90 million, as well as another 31 bank branch properties totaling 153,950 sf from Prefco Quartre LLC for $36.8 million. The Three Beaver Valley Road office development is 100% leased on a triple net basis to American International Insurance Company (a wholly owned subsidiary of American Insurance Group) and Wachovia Bank, National Association. Estimated rental income for 2004 is $4.5 million. In January 2006, under the terms of the lease, Wachovia will vacate its space and American International Insurance Company will take over the entire property.