Office Properties Income Trust Acquires $550M in Assets

CHICAGO, IL – Office Properties Income Trust has completed two separate acquisitions of two class A office properties for a total purchase price of $550 million.

For the first of the two acquisitions, the firm purchased the 531,190-square-foot office asset, known as 1K Fulton in Chicago, IL for $355 million, excluding closing costs. The sales price reflects a current GAAP cap rate of 4.7% at closing.

The LEED certified property in Chicago’s Fulton neighborhood is 99% leased and 73% occupied by Google’s Midwest headquarters. The property, which underwent a full redevelopment in 2015, features ground-floor retail, 157 subterranean parking spaces, two fitness centers, multiple roof decks and a steak house restaurant.

Office Properties Income Trust’s second acquisition comprises the 345,917-square-foot office asset, Twelve24, in Atanta, GA, which was acquired for $195 million, excluding closing costs. The sales price reflects a current GAAP cap rate of 6.3% at closing.

Constructed in 2021, the property is currently 98% occupied and 96% leased to Insight Global. Located in Atlanta’s Central Perimeter neighborhood, the asset features a fitness center, an outdoor patio, a café, ground-floor retail and 1,023 parking spaces.

For the transactions, Office Properties Income Trust utilized cash and drew $350 million under its unsecured credits facility to fund these acquisitions. The firm plans to sell additional non-core properties as part of its capital recycling program to repay drawings under its credit facility used to fund these acquisitions.

“These two class A office properties squarely fit our objective of owning, operating and leasing properties that are primarily leased on a long term basis to tenants with high credit quality characteristics,” states Chris Bilotto, president and COO Office Properties Income Trust. “Since commencing our capital recycling strategy in 2020, we have sold more than $280 million of properties and now are pleased to redeploy the proceeds into these carefully selected acquisitions of newly constructed core real estate in strong, growing markets majority leased to high credit quality tenants.”

Bilotto adds, “By selling older properties, those with shorter lease terms or upcoming vacancies, we have eliminated anticipated leasing downtime and significant capital expenditures over the next few years. These new acquisitions enhance our portfolio metrics and are accretive to our cash flows.”