The portfolio was acquired for AMB Institutional Alliance Fund III, the REIT's open-end US co-investment fund. The purchase price includes cash, assumed debt and partnership units of AMB Property II LP.
The air-freight buildings are located within 1.5 miles of Seattle-Tacoma International Airport, Dallas Fort Worth International Airport and George Bush Intercontinental Airport in Houston. The excess developable land is in Houston and Atlanta.
In Dallas, AMB acquired 15 airport-related facilities totaling more than 1.2 million square feet immediately north and west of the airport. The acquisition increased AMB's Dallas portfolio by 28% to approximately 5.5 million sf.
In Houston, added 913,000 sf of distribution space in the airport submarket, bringing its total to about 1.3 million sf. In Seattle, AMB acquired a 137,000-sf distribution facility directly adjacent to the airport, taking its total there to 8.8 million sf.
The excess land in the deal includes 59 acres of airport-adjacent land in Houstin capable of supporting 812,000 sf of future development, and 72 acres in Atlanta that are being held for sale, according to AMB.
The purchase price included the assumption of $68 million of debt and the issuance of $64 million in operating partnership units in AMB Property II LP priced at $56.32 per unit.
In October, AMB reported passing worthwhile milestones during the third quarter, which saw its earnings increase by 9.8%. Occupancy in its 120-million-sf industrial portfolio is at its highest level since the third quarter of 2001 and rents on renewals entered positive territory for the first time since the first quarter of 2002.
The locally headquartered REIT reported portfolio occupancy of 95.9%, a 50 basis point improvement from the end of the second quarter and a 130 basis point improvement from the third quarter of 2005. More significantly, it reported that rents on lease renewal and rollover in its operating portfolio increased 9.9% during the quarter. Rents declined in the second quarter by 0.9% and by 7.5% during the third quarter of 2005.
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