Bank of America Closes $770 Million Sale Leaseback of 158 Properties

Bank of America Closes $770 Million Sale Leaseback of 158 Properties
Bank of America Corp. has closed its deal to sell 158 buildings with 8.1 million square feet of space to American Financial Realty Trust (NYSE: AFR) for $769.8 million as part of a sale and leaseback agreement. The seller was Bank of America NA, a subsidiary of Bank of America Corp. The properties consist of office buildings, bank branches and operations centers in 19 states.

The deal had raised a few eyebrows on Wall Street because Banc of America Securities Inc. was one of two lead managers for American Financial's initial public offering the previous week. Much of the money raised in that IPO was to be used to close this deal. BofA and Wachovia Corp., one of the underwriters of the offering, are among American Financial's largest customers.

The IPO went very well, raising more than $740 million for the company, after fees, on the sale almost 64 million shares at $12.50 each. About 200,000 of those shares were offered by selling shareholders, and the proceeds for those sales did not go to the company. That total also included 8.9 million shares allocated to underwriters for over allotments on the sale.

The Pennsylvania-based REIT specializes in owning and managing properties for financial institutions. Before this latest deal, it owned 274 buildings, including 219 bank branches. BofA will lease 5.2 million square feet of the portfolio it sold to American Financial for 20 years on a triple-net basis. The Charlotte-based bank will also lease an additional 804,000 square feet on a short-term basis. Approximately 813,000 square feet are leased to third party tenants already.

The properties include office buildings, banking and operations centers located in 19 states, including the Bank of America Center in Chicago, a 1 million square-foot, 50-story office building across from the Chicago Board of Trade in the financial district. Sphere: Related Content