PS Business Parks Partners has entered into an agreement with an affiliate of Longfellow Real Estate to sell Lusk Business Park in San Diego. The property will trade hands for $315.4 million.

PS Business Parks will have $311 million in net proceeds from the transaction after settling transaction costs. Earlier this week, Longfellow Real Estate's due diligence period ended and the purchase price deposit became non-refundable.

The net sales price represents a 1.6% cap rate based on the anticipated $5.1 million in net operating income for 2021. PS Business Parks Partners plans to use $50.5 million from the transaction in a 1031 exchange to acquire Port America Industrial Park in Dallas, Texas. It will look for a 1031 exchange for the remainder of the proceeds, but if it cannot find one, the company will pay a one-time special dividend sourced by a portion of the disposition proceeds, $166.0 million and $183.5 million, or $4.75 to $5.25 per common share and unit.