Goldman Sachs Unit in Salt Lake City Has a New Landlord

KBS Real Estate Investment Trust III (KBS REIT III), a public non-traded REIT, has acquired a Class-A, LEED Gold certified office tower in the central business district of Salt Lake City. The property was purchased for $170.5 million, plus closing costs.

Built in 2009, 222 Main is a 426,657 square foot tower with 9,000 square feet of ground floor retail and restaurant space, plus a nine story parking facility. At the time of the purchase, the building was 85 percent leased to 16 tenants.

Its largest tenant, Goldman Sachs, occupies 176,373 square feet or 41% of the tower. Its lease expires May 31, 2025, with three five year extensions. The second largest tenant, Holland & Hart, a law firm, occupies 18% of the building or 76,257 square feet with the same lease expiration date.

“We believe 222 Main was designed to the highest standards with first-class finishes throughout which, along with its location in Salt Lake City’s CBD, makes it a premier office property,” said KBS Capital Advisor Senior VP Tim Helgeson in a statement. 

Situated close to a stop on the city’s light rail system, 222 Main is an easy commute for both suburban travelers and those flying into Sale Lake International Airport.

“This is an asset that benefits from unobstructed views of the Wasatch Range. Additionally, downtown Salt Lake City is just two blocks from the $2 billion City Creek Center mixed use development, which features numerous first-class amenities,” added Helgeson.

The purchase was funded with mortgage borrowings, fund offerings, and the sale of other assets. Of the $170.5 million purchase price, $102.7 million was financed through a seven year mortgage loan from an unaffiliated entity. The loan, bearing a 3.97% fixed rate, initially calls for interest only payments. Beginning April 1, 2016, principal and interest are paid.

KBS REIT III looks to invest in high quality commercial real estate with an interest in Class A office towers located in markets experiencing job growth.

The REIT expects to close April 24, 2014 and through September 30, 2013, had raised about $532 million.