LOUISVILLE—KBS Real Estate Investment Trust II just completed the sale of National City Tower, a 723,300-square-foot, glass and steel class A office building located at 101 S. Fifth St. in downtown Louisville. The Newport Beach, CA-based trust did not disclose the price or the buyer.
However, according to a recent filing with the US Securities and Exchange Commission, the trust sold the 40-story building to “a purchaser unaffiliated with the Company or its advisor for $127.3 million or $124.0 million net of concessions and credits.” The trust originally bought the building in 2010 for $113.6 million.
Since then, the REIT invested in many capital improvements including upgrades to major building components and systems, renovations to common areas and the development of new tenant amenities, such as a conference facility on the 19th floor. The tower also provides other amenities including an 11,200-square-foot deli and restaurant, tenant Wi-Fi lounge, sundry shop, Starbucks, full-service bank and an executive parking garage.
In addition, the property has floor plates of about 17,000-square-feet each, which company officials say provides one of the highest ratios of floor area to glass line in the Louisville market.
It's typical of KBS to buy one of the top properties in a particular market, launch some capital improvements, and make a sale after holding it for several years. As reported in GlobeSt.com, KBS recently made some big investments in the St. Louis metropolitan area including the purchase of 101 S. Hanley, a 346,451-square-foot tower in suburban Clayton, from Duke Realty for $62.25 million.
“National City Tower was primarily acquired for its strong and secure cash flow, not for capital appreciation,” KBS stated in its SEC filing. “The property met the Company's return goals and objectives in terms of both cash flow and capital appreciation.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
