Griffin Capital Essential Asset REIT (GCEAR) successfully sold a property in East Hanover, New Jersey after thirteen months of ownership. Eagle Rock Executive Office Center (Eagle Rock), which was originally acquired in November 2013 for $6.5 million as part of an 18 asset transaction, sold for $10.95 million.
GCEAR focuses on single tenant properties and Eagle Rock is a multi-tenant office center. The REIT acquired it as a component of a much larger purchase with the expectation of adding value in preparation for a future sale. At the time of acquisition, the property was only 35% occupied and through three lease transactions under GCEAR’s ownership, Eagle Rock’s occupancy now stands at 41%.
“This sale of Eagle Rock represents the execution of a strategy we put in place when it was acquired as part of an 18-property portfolio transaction,” said Scott Tausk, Griffin Capital’s Managing Director of Asset Management. He continued, “Because the property did not fit the REIT’s single tenant, essential asset investment criteria, our asset management team created a short-term value creation business plan, executed that plan and divested the asset at a profit, all within thirteen months—we are very pleased with this transaction and will strive to replicate these results as similar opportunities arise.“
Mike Escalante, Griffin Capital’s Chief Investment Officer added, “Although the majority of our investment strategies focus on the acquisition and ownership of single tenant assets, from time to time we do acquire multi-tenant assets as part of portfolio transactions. Eagle Rock is one such asset, and we are pleased we were able to add value during our brief ownership.”
GCEAR closed its follow on offering September 30, 2014 after raising gross proceeds of $1.3 billion collectively in its private, public, and DRP offerings. At that time, the REIT’s portfolio consisted of 54 properties across 19 states with a combined acquisition value of $1.8 billion.