American Realty Capital Global Trust II Inc., a publicly registered non-traded real estate investment trust sponsored by AR Capital, acquired an office building and ground leasehold interest located in Amsterdam, Netherlands. The seller was ING Bank N.V.
The deal was a sale-leaseback transaction at a contract purchase price of $98.6 million (based upon an exchange rate of $1.12 to €1.00, as of the date of acquisition), exclusive of closing costs.
The property contains approximately 509,369 rentable square feet and is comprised of 494,364 square feet of office space, 15,005 square feet of archive space, and 433 parking spaces, and is 100 percent master-leased to ING. The master lease commenced in June 2015, has a 10-year term and expires in June 2025, with two five-year renewal options.
The lease contains annual rental escalations based on published inflation statistics. The lease is net whereby the tenant is required to pay certain operating expenses, in addition to base rent. The annualized rental income is approximately $8.7 million based upon an exchange rate of $1.12 to €1.00, as of the date of acquisition.
According to a filing with the Securities and Exchange Commission, the property is located in the Southeast district of Amsterdam, an area known for being attractive to businesses mainly due to its accessibility to public transport and several motorways. Several well-known multinational business headquarters are located in the Southeast district, including American Express, Deutsche Bank, ABN AMRO, BT, and Peugeot Citroen.
The office building characterized by its campus-like and flexible design, according to the filing. Its layout includes a central building that connects to six different wings, making it suitable for multitenant use if necessary, and benefits from large floor plates. The property was previously acquired by ING with the objective of utilizing the building as an IT hub for the Netherlands, and it will be used to consolidate ING’s IT operations.
American Realty Capital Global Trust II Inc.’s interest in the property is a leasehold interest, with the ground lease expiring in June 2050. As ground lessee, the company has the right to renew the ground lease for unlimited periods of 50 years from the Municipality of Amsterdam, the lessor. ING does not have a material relationship with American Realty Capital Global Trust II, its operating partnership, sponsor, advisor, or any of their respective affiliates.
American Realty Capital Global Trust II funded the acquisition with available cash on hand from the ongoing IPO, as well as two loans in an aggregate amount of $73.9 million (based upon an exchange rate of $1.12 to €1.00, as of the date of acquisition). American Realty Capital Global Trust II, through a wholly owned subsidiary of its operating partnership, entered into a mortgage debt agreement with Deutsche Postbank AG for the loan amount.
American Realty Capital Global Trust II seeks to acquire a portfolio of single tenant net leased commercial real estate properties, investing 50 percent of its capital in the U.S. and 50 percent in Europe. The company commenced its $3.125 billion initial public offering in August 2014, and as of March 31, 2015, had received $107.1 million gross proceeds from investors at $25 per share.