SEC Edgar Web Site - May 10, 2004
On May 7, 2004, the American Financial Realty Trust and Bank of America, N.A. entered into a letter of understanding regarding the Company's purchase of a portfolio of 263 properties, aggregating 7.5 million square feet. The portfolio described in the letter of understanding includes 179 bank branches and 84 office buildings, which the Company will purchase for aggregate consideration of approximately $546 million.
The proposed transaction contemplates that the Seller will lease back from the Company approximately 63.5% of the space in the portfolio for a term of 15 or 20 years (at the option of the Seller) at an annual triple net rental rate equal to between approximately 8.4% and 8.55% of the Company's purchase price for the leased
space, depending on the term selected.
The Seller is also expected to occupy an additional approximately 7% of the portfolio for up to 18 months, at an annual rent equal to operating expenses plus $1.00 per square foot. An additional approximately 11% of the portfolio is currently leased to third party tenants, while the remaining approximately 15% of the portfolio will be acquired vacant.
(The properties are believed to be thos acquired by Bank of America in its merger with FleetBoston Financial Corporation.)
American Financial expects to achieve an average annual capitalization rate of approximately 9.25% on the portfolio over the initial 20 year term of the Seller's leases, or approximately 9.0% assuming the Seller selects an initial 15 year lease term.
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Saturday, May 22, 2004
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