Acquisition costs for the quarter were about $719 million and included the purchase of Boston's one-million-sf, fully leased State Street Financial Center. As of March 31 of this year, the REIT owned or held leasehold interest in 583 properties with an aggregate of approximately 18.2 million sf in 28 states and Washington, DC. Of those properties, 363 are bank branches and 220 are office buildings.
At the end of first quarter, 90.4% of American Financial's annualized contractual rent was derived from financial institutions. Its three largest tenants were Bank of America, which represented 44.8% of all contractual rents; State Street Corp. with 26.9%, and Wachovia Bank with 9.7%.
The REIT also made gains in a continuing process of strengthening its balance sheet by refinancing to long-term, fixed-rate debt. A commitment was put in place to refinance $43 million of floating rate on a Wilmington, MD property. When the refinancing is completed this June, American Financial will have less than $8 million of floating debt outstanding, which will represent less than 1% of its total outstanding debt.
Following the first quarter, the company acquired six bank branches in Florida and Georgia for $4.8 million under a formulated price contract with Wachovia. It also signed and amendment to its FPC with Bank of America, which expanded the territory of its existing BOA contract to 30 states and the District of Columbia.
"Formulated price contracts are an integral part of our acquisition strategy," says Nicholas S. Schorsch, president and CEO. "While transactions under these contracts are typically small, our returns from releasing or disposition of properties acquired through FPCs are often quite substantial. Further, we view these contracts as the first stage in the development of broader relationships with both Bank of America and Wachovia," he says.
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