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Australian Firm Puts $600M Portfolio on Market

WASHINGTON, DC-This is a high-quality portfolio as its tenant base is primarily US government agencies that are expected to remain in the buildings in the long term.

By Erika Morphy | Updated on June 04, 2008

WASHINGTON, DC-Record Realty Trust, the US subsidiary of an Australian firm, has put a 22-asset portfolio on the market. Valued at $600 million–a price that is based on a 7% cap rate of the portfolio’s NOI–the office properties are primarily occupied by government tenants. Jones Lang LaSalle’s John Kevill, Guy Ponticiello, Collins Ege, Suzanne Martinez and Sean McDermott are handling the sale.

JLL will begin receiving offers within the next several weeks, Ponticiello tells GlobeSt.com. The assets are spread across 14 states and the portfolio is 97% occupied. JLL has been in discussions with prospective bidders over the portfolio over the last several weeks–interested parties range the gamut from domestic and international private and institutional buyers. Indeed an international sale could well be the outcome, he adds. “The portfolio is owned by an international company and US government tenants are high value tenants.”

The properties are expected to sell as a complete portfolio, as there is $520-million in debt on the portfolio, which is cross-collateralized on the assets. The weighted-average interest rate on the senior debt at 6.15%, according to the portfolio’s marketing materials, and the weighted-average remaining senior term is approximately six years.

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