Office Properties Income Trust (OPI) has acquired two Class A office properties for $550 million.
Office Properties Income Trust acquired the approximately 531,190 square foot Class A office property, located one block from the Chicago Transit Authority rail stop, known as 1K Fulton in Chicago, IL for $355 million, excluding closing costs, reflecting a current GAAP cap rate of 4.7% at closing. The property is 73% leased to Google as its Midwest headquarters and 99% leased overall, with a weighted average lease term of 6.6 years.
OPI also acquired the approximately 345,917 square foot Class A office property known as Twelve24 in Atlanta, GA for $195 million, excluding closing costs, reflecting a current GAAP cap rate of 6.3% at closing. The property is 96% leased to Insight Global as its corporate headquarters and 98% leased overall, with a weighted average lease term of 14.2 years.
The property was constructed in 2021, includes direct access to MARTA (Atlanta’s rail system), and features many amenities, including a fitness center, outdoor patio, café, ground-floor retail and a total of 1,023 parking spaces.
“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,” said Chris Bilotto, President and Chief Operating Officer of OPI.
”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. 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,” added Bilotto.