Non-traded REIT, Griffin Capital Essential Asset REIT (Essential Asset REIT), yesterday announced the operating results of its second quarter. The company, which focuses on creating a diversified portfolio of “business essential” office and industrial properties net-leased on a long-term basis to credit worthy corporate tenants, added seven properties to its portfolio.
The seven properties are institutional-quality and each is located in a different state. With an aggregate purchase price of approximately $339.3 million, the properties total about 1.4 million square feet. As of the end of the second quarter, the REIT’s properties had a weighted average remaining lease term of approximately 8 years with average annual rental rate increases of approximately 2.1%.
Since December 31, 2013, the company’s total acquisition value has increased by 19% and portfolio square footage increased by 11%. The total capitalization of the portfolio is over $2.2 billion. For the second quarter, the company’s MFFO was approximately $15.5 million, which represents year-over-year growth of approximately 264% for the same quarter in 2013. FFO was approximately $4.2 million for the quarter ended June 30, 2014.
On April 22, 2014, Essential Asset REIT stopped accepting new subscriptions after raising maximum proceeds in its follow-on offering of $1.1 billion. Additionally, on May 8, 2014, the REIT canceled its credit facility and term loan with KeyBank and a syndicate of other lenders, and replaced it with an unsecured credit facility lead by KeyBank and Bank of America. The arrangement consists of a $450 million revolving credit facility and a $300 million term loan.
“Despite competition for top quality acquisitions, we were able to add seven great properties to our portfolio during the second quarter, and our REIT’s total capitalization surpassed $2.2 billion, an impressive milestone, commented David Rupert, President of the Essential Asset REIT. “We did not sacrifice quality for growth—several important metrics we track improved this quarter, including portfolio occupancy, lease duration and average annual rental rate escalations. Overall, it was another outstanding effort by our acquisition team, led by our Chief Investment Officer Michael Escalante,” added Mr. Rupert.
As of June 30, 2014, Griffin Essential Asset REIT’s portfolio included 53 office and industrial distribution properties that total approximately 12.4 million rentable square feet and represent total REIT capitalization of over $2.2 billion.