Griffin Capital Essential Asset REIT Declares New NAV Per Share
The board of Griffin Capital Essential Asset REIT, a publicly registered non-traded REIT, approved an estimated net asset value of $10.05 per share of common stock as of June 30, 2018.
The board of Griffin Capital Essential Asset REIT, a publicly registered non-traded REIT, approved an estimated net asset value of $10.05 per share of common stock as of June 30, 2018. The new NAV is a increase of approximately 0.1 percent compared to the $10.04 NAV approved by the board last year. Shares were originally sold for $10.00 each.
The valuation was based on an estimated fair value of the company’s assets less the estimated fair value of its liabilities, divided by the number of shares of common stock outstanding. Robert A. Stanger & Co., an independent valuation firm, assisted in the valuation of each of the properties in the REIT’s portfolio.
Over the past year, Griffin Capital Essential Asset REIT sold a number of assets resulting in a portfolio valuation decrease of $79.8 million. Since the prior year valuation, the company sold the DreamWorks Animation Headquarters Campus and One Century Place for a combined $390 million. The company profited $105 million from the sales.
The company later acquired four assets through 1031 exchanges totaling $313.1 million resulting in a net decrease in the real estate portfolio of $76.9 million from these transactions. The net disposition proceeds were primarily used to fund share redemptions and make improvements to the existing properties.
Last year, the REIT disclosed that 17 tenants would require less space over the long term due to corporate mergers and restructurings. Company sources at the time indicated that the REIT would likely reap early termination fees from these tenants, which would offset costs to re-tenant the vacant space at more favorable market lease rates.
Over the past 12 months the company reached a settlement with six tenants, resulting in termination fees totaling over $17.6 million. The company also noted that it is actively marketing for sale two of the affected assets with the expected disposition prices reflected in the current determination of NAV.
The company has executed approximately 1 million square feet of leasing activity this year. Occupancy as of June 30, 2018 was 95.8 percent compared to 96.7 percent, year-over-year, with additional leasing under negotiations.
Griffin Capital Essential Asset REIT has also converted its short-term floating rate debt to long-term fixed-rate financing on its portfolio, and as of June 30, 2018, more than 93 percent of its financing is fixed-rate debt. The company has an undrawn revolver capacity of $101.2 million.
Griffin Capital Essential Asset REIT oversees a portfolio of 76 office and industrial properties purchased for a total of $3.2 billion, as of the second quarter of 2018. 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.
