The company funded the acquisition through a $46.4-million, 10-year interest-only mortgage loan with a third-party lender at a fixed rate of 6.2%. The balance of the purchase price was funded by the company's revolving credit facility. Republic was advised by KBS Realty Advisors.
Over 90% of the space in WillowWood I & II is leased to institutional class tenants, such as Tetra Tech Inc., Qwest and the US General Services Administration's Federal Technology Service. Republic typically acquires assets off-market rather than a competitive bidding process. "Our investment in the remaining phases of the WillowWood complex epitomizes our ability to acquire assets off-market and under terms and considerations favorable to our company's strategy and valuation precept," CEO Mark Keller says. "The below market rents will allow us to capitalize upon the improving market conditions and increasing rental rates."
Keller adds that the acquisition will also further diversify its tenant base. The REIT's portfolio now consists of 12 class A office properties totaling approximately 2.2 million sf in the DC-area market.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
