The public but un-traded REIT from Atlanta paid $20.7 million for the completed office building, known as LakePointe 5. For the building under construction, Wells REIT II paid $17.1 million, which includes $2.5 million for the land, $3.9 million for construction costs incurred to date and an estimated $10.7 million to complete the project, according to the SEC filings.
The building under construction, known as LakePointe 3, is 40% preleased. The Lash Group has committed to approximately 26% of the building and Centex Construction Co. LLC has committed to approximately 14%. Both are said to be long-term leases that commence upon building completion, which is currently expected in September 2006.
LakePointe 5 was completed in 2001 and is fully leased. Tenants include Lash Group (approximately 69%), First Franklin Financial Corp. (approximately 12%), Centex (approximately 10%) and various other office tenants (approximately 9%). Although Centex will vacate its space in the building when its new space in LakePointe 3 is ready, Lash has already agreed to backfill that space in addition to its preleased space in LakePointe 3.
Lash, a business unit of publicly held AmerisourceBergen Corp., designs software solutions for the reimbursement-related issues of pharmaceutical companies, medical device manufacturers and biotechnology firms. Centex Construction, a business unit of publicly held Centex Corp., provides construction management and design-related services nationwide for both public and private sector clients. First Franklin, a subsidiary of publicly held National City Corp., originates, purchases, sells and securitizes residential mortgage loans and lines of credit.
The current aggregate annual base rent for Lash, First Franklin, Centex and the other two tenants of the LakePointe 5 Building is approximately $2.3 million. The current weighted-average remaining lease term for Lash, First Franklin, Centex and the other two tenants of the LakePointe 5 Building is approximately 10 years, according to the SEC filing.
Lash and First Franklin have the right, at their option, to extend the terms of their lease for one additional five-year period. First Franklin has a one-time option to terminate its lease effective April 2008 for a termination fee equal to the sum of seven and a half months of rent plus unamortized leasing costs and tenant improvements.
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