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Griffin Capital REITs Purchase Adjacent Properties

A pair of Griffin Capital Corporation public, non-traded REITs recently closed on two Class A properties in Houston Texas.  Both buildings are newly constructed and 100% leased to Wood Group Mustang, Inc. (Mustang), a subsidiary of John Wood Group, PLC.

Griffin Capital Essential Asset REIT II, Inc. (GCEAR II) acquired Westgate II, a four-story, 186,286 square-foot office property for $57 million, plus closing costs.  Mustang’s lease is a triple-net lease with about nine years remaining.  Annual base rent is approximately $3.8 million and includes 2.5% annual rent increases.  The REIT acquired the property with a going-in capitalization rate of 6.68 percent which is calculated by dividing project net operating income for the first year by the purchase price, exclusive of closing and offering costs. 

Westgate II houses Mustang’s engineering team. 

Westgate III was acquired by GCEAR
Westgate III was acquired by GCEAR

Griffin Capital Essential Asset REIT, Inc. (GCEAR) acquired Westgate III, a five-story, 225,518 square foot building that serves as Mustang’s headquarters, which is adjacent to Westgate II.  No further details regarding Westgate III’s acquisition were available at the time of publication. 

“We are excited to announce yet another acquisition for GCEAR II, and look forward to continuing to build the company’s real estate portfolio with high-quality assets. We are also pleased to add Wood Group Mustang to GCEAR’s sizeable roster of creditworthy, blue-chip tenants, and are particularly pleased that the REITs were able to purchase two assets that we believe are very important to the Tenant. The Tenant has been in occupancy in the Park 10 development since the Company was founded over 25 years ago,” commented Louis Sohn, Griffin Capital’s Director of Acquisitions.