Griffin Capital Essential Asset REIT Inc., a publicly registered non-traded real estate investment trust, has issued $125 million of Series A cumulative perpetual convertible preferred stock in a private exempt offering. The shares were purchased by a Korean trust.
The closing is the first tranche of a total of $250 million of perpetual preferred, with the balance expected to be issued within 60 days. The holder of the Series A preferred shares will receive an initial annual distribution of 6.55 percent and the option to convert the shares into REIT common stock any time after five years.
The shares were purchased in their entirety by SHBNPP Global Professional Investment Type Private Real Estate Trust No. 13 (H), a trust sponsored by Hana Financial Investment, the sole bookrunner. The lead investor in the trust is NH Investment & Securities and Shinhan BNP Paribas Asset Management is the trust asset manager.
The REIT currently intends to leverage the $125 million of preferred equity to purchase approximately $200 million of additional net-leased real estate assets.
“After several months of relationship building, we could not be more pleased to have completed the first leg of this equity transaction,” said Kevin Shields, chairman and CEO of the REIT. “It was a pleasure to work closely with Hana Financial and the teams at both NH and Shinhan and we hope this is the first in a series of transactions we can accomplish together.”
Griffin Capital Essential Asset REIT oversees a portfolio of 76 office and industrial properties purchased for a total of $3.2 billion. The company’s initial public offering was declared effective by the Securities and Exchange Commission in November 2009. The REIT closed its follow-on offering in April 2014 and has raised a total of approximately $1.5 billion in investor equity, according to Summit Investment Research. Griffin Capital Essential Asset REIT is one of several REITs sponsored or co-sponsored by Griffin Capital.