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$119M Office Buy Closes With $111M Assumption

HOUSTON-Lexington Corporate Properties Trust takes keys to more than one million sf in four office buildings leased to Baker Hughes subsidiaries. Part of the deal requires picking up a quartet of first mortgages with 2015 payoff dates.

By Jennifer Brenner Andrade | Updated on March 28, 2004

HOUSTON-Lexington Corporate Properties Trust has paid $119.3 million for a four-property, one-million-sf portfolio of metro-area buildings, all net leased to subsidiaries of oilfield services firm, Baker Hughes Inc. The transaction included the assumption of $110.7 million in first mortgages.

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.

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