KANSAS CITY, MO-Orix Real Estate Capital Inc. and Boulder Net Lease Funds LLC, both based in the Chicago area, have joined in a venture to buy a 146,591-sf office facility that was formerly owned by computer giant Gateway. The building is now leased as a call center by the Sprint Nextel Corp., which has nine years left on its lease. The property was purchased for about $13 million.
The property had been a larger complex owned by Gateway. However, the company consolidated its real estate and vacated most of the space, using some still as a call center until Sprint moved in. Another 67,000-sf building was sold to Kansas City, MO for $5 million in June 2005.
Eric Wollan, SVP of acquisitions for Orix, says his company is working together with Boulder on a number of these types of deals. “We have a program where we're going out jointly to buy single-tenant assets, typically smaller buildings,” he tells GlobeSt.com. “It's our goal to assemble a number of these $7 million to $20 million assets, with a geographic and property mix, office and industrial. We expect to continue this program for the next couple years.” He says there is not a dollar figure set to attain for the joint venture program.
This property at 1414 Genessee St. was built in 1996, and renovated in 2006. The property straddles the state line between Kansas and Missouri, Wollan says, and features 22.5-foot ceiling heights, three delivery docks, a backup power generator and parking for more than 1,200 vehicles. “It's in a unique location, so close to the Downtown,” he says. “We're really positive on the new development trend in Kansas City right now.” He wouldn't discuss the current lease rate. The average lease rate for class B office is about $13.91 per sf, according to a third quarter market report by Grubb & Ellis.
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