Griffin Capital Essential Asset REIT Forms Joint Venture with a Publicly Traded REIT

Non-traded REIT Griffin Capital Essential Asset REIT (GCEAR) has acquired a 132,280 square foot property through a joint venture with listed REIT, Digital Realty Trust.

To the joint venture, which was formed yesterday, Digital Realty Trust contributed the Turn-Key Flex® data center in Ashburn, Virginia, which is 100% leased. The transaction is valued at $185.5 million excluding $2.1 million of closing costs.

A $102 million five-year bank loan was arranged through the joint venture. Digital Realty Trust received approximately $168.4 million in the transaction, made up of its share of the initial draw-down on the bank loan and GCEAR’s equity contribution.

GCEAR will hold 80% interest in the joint venture while Digital Realty Trust will hold 20%. Digital Realty Trust will receive management fees for its continued management of the property and will also receive proceeds from certain excess cash flow.

GCEAR specializes in creating a diversified portfolio of “business essential” office and industrial properties net-leased on a long-term basis to credit worthy corporate tenants. Digital Realty Trust offers data center services such as colocation strategies and solutions.

“We are pleased to establish this relationship with Griffin Capital Essential Asset REIT,” commented Jeff Hoppen, Managing Director, Capital Markets for Digital Realty. “This joint venture transaction is a significant milestone for Digital Realty, as it furthers our objective of maximizing the menu of available capital options, while minimizing the related cost. The transaction also has the ancillary benefit of reducing our tenant concentration while establishing an attractive private market valuation benchmark for our Turn-Key Flex® properties.”