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American Financial Obtains $520M Financing for State Street Acquisition

BOSTON-American Financial completes its acquisition of State Street Financial Center, the recently built one-million-sf office tower at One Lincoln St., and nailed down $520 million in financing from Lehman Brothers.

By Naomi Grossman | Updated on February 18, 2004

BOSTON-American Financial Realty Trust completed its acquisition of State Street Financial Center from Kingston Bedford Joint Venture LLC, a partnership comprised of the State Teachers Retirement System of Ohio, Morgan Stanley Real Estate Funds, the Gale Co. and Columbia Plaza Associates.

The recently built 36-story one-million-sf office tower at One Lincoln St. between Chinatown and South Station in the city’s financial district is 100% leased by State Street Corp. The purchase price of $705.4 million, or $640 per sf, is one of the city’s biggest deals ever.

To finance the acquisition, the Jenkintown, PA-based trust received a 20-year secured $520-million loan from Lehman Brothers Holdings Inc. The loan provides for a fixed interest rate of 5.79%. American Financial’s equity investment in the building has been financed with available cash and the issuance of $35.9 million in Operating Partnership Units in First States Group LP, its operating partnership. The nearly two million OP Units were issued to Stan Gale and other affiliates of the Gale Co. LLC, the original developer of the site, in exchange for their interests in the property.

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