On January 24, 2014 Griffin Capital Essential REIT (Griffin) entered into a loan agreement of $110.64 million. Griffin received the financing for a collection of 5 office and industrial properties in its portfolio. The funds, provided by AIG, will be used to refinance the properties, which previously served as Griffin’s security for their credit facility with Key Bank National Association and other lenders. The portfolio is cross-collateralized and cross-defaulted to secure the loan. The loan has a term of 15 years and a fixed interest rate of 4.96%.
The properties in the portfolio are leased to investment-grade or investment-grade quality tenants. The properties are the Verizon building in New Jersey, the Avnet in North Carolina, the Northrop Grumman in Ohio, the Schlumberger in Texas, and United Technologies in Arizona. The agreement was arranged by HFF (Holliday Fenoglio Fowler, L.P.) on behalf of Griffin Capital.
Chief financial officer of REIT sponsor Griffin Capital Corporation, Joseph E. Miller, commented in a statement to the WSJ, “We are pleased to have completed this long-term, fixed-rate secured debt transaction with the lender.” He continued, “With this financing transaction, we reduced our short-term, secured debt obligations and lengthened our debt maturities to more closely align with our weighted average lease duration.”
Griffin Capital Essential REIT is a non-traded REIT focused on creating a diversified portfolio of “business essential” office and industrial properties net-leased on a long-term basis to credit worthy corporate tenants.