KBS REIT III Finalizes Purchase of $150 Million CA Office Property

KBS Real Estate Investment Trust III Inc., a publicly registered non-traded REIT, finalized its purchase of Almaden Financial Plaza in downtown San Jose for $150 million. The seller is reportedly an affiliate of Embarcadero Capital Partners.

KBS REIT III intends to rename the property “The Almaden” to reflect the growing list of technology companies relocating there.

The Almaden is comprised of three office buildings totaling 416,127 square feet and situated on approximately 5.8 acres of land. The buildings were renovated in 2006 and are 94 percent leased to 54 tenants with an average remaining lease term of 3.9 years. The property has a conference center, fitness center and a locker room with showers.

Located just south of the “Innovation Triangle,” which borders U.S. Highway 101, Highway 237 and Interstate 880, the property is an eight-minute walk from a Caltrain station and within two blocks of the proposed future Bay Area Rapid Transit (BART) station.

“The Almaden’s location is in the heart of downtown San Jose, offering proximity to the Silicon Valley’s major technology companies. The significant walkable amenities, access to public transportation and recently developed and planned future development of multi-family projects provides the tenants at The Almaden a live, work, and play environment,” said Rodney Richerson, regional president for KBS Capital Advisors.

The purchase was funded with proceeds from a $84.8 million mortgage loan and from its now-terminated initial public offering. At closing, $76.1 million of the loan was funded and the remaining $8.7 million is available for future disbursements. The loan matures on October 1, 2016, has two six-month extensions options, and bears interest at a floating rate of 175 basis points over one-month LIBOR.

KBS REIT III also owns nearby Ten Almaden.

Earlier this month, The DI Wire reported on the signing of the purchase agreement for The Almaden property.

KBS Real Estate Investment Trust III, which closed its initial public offering in May 2015, manages a portfolio of 22 office properties and one mixed-use office/retail property totaling approximately 9.3 million rentable square feet with a collective occupancy rate of 89 percent. The company broke escrow in March 2011, and through June 30, 2015, has raised $1.8 billion in investor equity.

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