Lexington got a four-property portfolio, exceeding one million sf, with Baker Hughes subsidiaries as tenants. Each subsidiary has 11.5 years left on the lease. The average annual lease payments are $13.2 million, which represents 11.1% of the purchase price. T. Wilson Eglin, Lexington's CEO, says in a press release the Houston acquisition pushes first quarter closings for the REIT and its JV affiliates to $271.1 million. "As a result, we are well positioned to meet or exceed our acquisition volume target of $450 to $500 million in 2004," he says.
Lexington assumed first mortgages held by First Security Bank that were then sold to Wells Fargo in San Francisco. The loans, maturing in 2015, had a fixed interest rate of 8.04%. A spokesman for locally based Baker Hughes, which headquarters at 3900 Essex Lane, declined comment on the sale.
Seller Dana Commercial Credit Corp. of Toledo, OH acquired the portfolio from Baker Hughes in a sale/leaseback in February 2001, Joe Beham, vice president of the capital markets group for Dana Commercial Credit, tells GlobeSt.com. Then in late 2002, Dana Corp. announced a plan to exit the finance business and focus on its core business of designing, engineering and manufacturing automotive products.
The portfolio consists of the world headquarters for WesternGeco, a 554,385-sf office building at 10001 Richmond Ave. in the Westchase submarket; the 275,750-sf manufacturing plant and world headquarters for Hughes Christensen at 9110 Grogan's Mill Road in the Woodlands; Baker Petrolite's 165,836-sf headquarters and research laboratory at 12645 W. Airport Road in Sugar Land; and a 65,500-sf training and data facility located at 2520 WW Thorne near George Bush Intercontinental Airport.
Beham says Dana Commercial Credit approached the New York City-based REIT and a couple other buyers of disposed assets if they'd be interested in the Houston properties rather than bring the portfolio to market. The offer was made after Lexington bought the 157,511-sf New Jersey Natural Gas Building in Wall, NJ in January from Dana, which now has $50 million in assets left to sell.
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