Griffin Capital Essential Asset REIT II Inc., a publicly registered non-traded real estate investment trust, purchased a 70,000 square-foot, class A office complex that is fully leased to Allstate Insurance Company for approximately 10 years. The purchase price for the Allstate property was $14.75 million, plus closing costs, less a $350,000 credit applied at closing.
Allstate Insurance Company is a subsidiary of Allstate Corporation (NYSE: ALL), which provides property-liability and life insurance, as well as other types of insurance products in both the United States and Canada.
Located in Lone Tree, Colorado, the 3-story property was developed in 2000 as a build-to-suit for Sprint/Nextel, which occupied the building for approximately 15 years, prior to being fully leased by Allstate, with extensive interior renovations undertaken in 2015. The acquisition is the REIT’s first in the Greater Denver metropolitan area.
“The Denver metropolitan area has been of increasing interest to leading real estate investors and operators across the country over the past several years in particular. We’re excited for the REIT to enter this rapidly growing market for the first time through the acquisition of an institutional-grade asset with the key features necessary to generate value for our investors,” said Michael Escalante, Griffin Capital’s chief investment officer and president of the REIT.
He added, “We’re very pleased that this transaction enables the REIT to further diversify its holdings from both a geographic and credit concentration perspective. Equally important, this acquisition has been accomplished at an attractive risk-adjusted return given the credit quality, annual rental rate escalations, and duration.”
The REIT purchased the property from Farmers New World Life Insurance Company.
Griffin Capital Essential Asset REIT II, which closed to new subscriptions on January 20, 2017, invests in single tenant business essential properties throughout the United States, diversified by corporate credit, physical geography, product type and lease duration. The REIT has acquired 34 office and industrial buildings totaling approximately 7.2 million rentable square feet and asset value of approximately $1.1 billion. As of December 27, 2016, the company has raised approximately $252.3 million from the sale of class A shares, approximately $438.7 million from the sale of class T shares, and approximately $7 million from the sale of class I shares.