CoStar Group - May 5, 2010
Dividend Capital Total Realty Trust Inc. agreed to acquire a portfolio of office and industrial properties from iStar Financial Inc. for an aggregate purchase price of $1.4 billion, adjusted for closing costs and prorations of taxes, operating expenses, leasing costs and other items.
Although Dividend Capital did not identify the property assets it is acquiring, it did say that the portfolio consists of 33 office and industrial properties in 18 geographic markets within the United States aggregating approximately 11.8 million net rentable square feet. Included in this portfolio are 22 office properties in 12 markets aggregating approximately 5.1 million net rentable square feet and 11 industrial properties in 10 markets aggregating 6.7 million net rentable square feet.
The properties included in the portfolio are primarily leased to large corporate tenants subject to triple net leases.
Earlier this year, iStar Financial announced that it was pursuing a sale or other transaction involving a portfolio of corporate tenant lease assets representing an aggregate $1.1 billion of book value. The portfolio is encumbered by secured, non-recourse term debt with an aggregate principal balance of $947.9 million that matures in April 2011.
The transactions are expected to close in the second quarter of 2010 subject to finalization of due diligence and obtaining sufficient financing, as well as other customary closing conditions.
iStar has agreed to provide Dividend Capital with up to $125 million in mezzanine financing after the buyer has obtained a commitment for senior financing. Dividend Capital has made an initial earnest money deposit of $25 million in respect of the transactions.
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