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KBS Strategic Opportunity REIT II JV Buys Phoenix Office Park

KBS Strategic Opportunity REIT II, a publicly registered non-traded real estate investment trust, has purchased Grace Court, a business park located in the Central Business District of Phoenix. The property was acquired as a joint venture between KBS and Verus Holdings LLC for $33.3 million plus closing costs, according to a filing with the SEC. The REIT holds a 90 percent interest in the joint venture.

Grace Court is comprised of three Class A office buildings, Grace Court II, Grace Court III and Grace Court IV, as well as a recently renovated historical schoolhouse, Grace Court School.

Between the four buildings, the property has more than 310,000 square feet of rentable space and was awarded the Energy Star label for its energy efficiency and management practices. The property also includes a five-level parking garage and surface parking, collectively offering 1,000 parking spaces and providing tenants with an above-market parking ratio.

“The dynamic Phoenix office market is a draw for many employers due to its young talent pool and solid real estate fundamentals,” said Jason Espiritu, senior investment analyst of KBS Capital Advisors. “We believe the acquisition of Grace Court puts KBS at the center of this growing Phoenix market while adding a value-add investment opportunity to the KBS Strategic Opportunity REIT II portfolio.”

The properties are situated adjacent to the Arizona State Capitol Mall and blocks from Downtown Phoenix. The Grace Court buildings, which are anchored by government and state tenants, are situated a short distance from several transit stations, including the Phoenix Valley Metro Light Rail.

KBS Strategic Opportunity REIT II went effective in August 2014, and through a private placement offering and a subsequent initial public offering, has raised a total of $233 million in investor equity. The company’s $337 million portfolio was comprised of six investments as of the second quarter of 2017, according to Summit Investment Research.

 

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