LOS ANGELES — An affiliate of Oaktree Capital Management LP (NYSE: OAK), in partnership with National Financial Realty Inc. (NFR), has acquired a portfolio of 40 office buildings for $240 million. The acquisition of the 3.4 million-square-foot office portfolio, which is 90 percent leased to Wells Fargo Bank, establishes NFR as the largest privately held investment firm focused on acquiring and operating properties leased to regulated financial institutions.
The seller is First States Investors B LP, an affiliate of Newport Beach, Calif.-based KBS REIT I, a nontraded REIT. KBS said a year ago that it was selling assets to pay down debt and return money to investors, according to Bloomberg.
“The acquisition is another example of Oaktree’s commitment to relationship-based transactions with well-positioned strategic operating partners like NFR, in addition to lenders and borrowers in need of capital solutions,” says John Brady, managing director and head of global real estate for Oaktree.
Properties in the portfolio are leased on a long-term basis to Wells Fargo and include mission critical operations facilities as well as branch offices in eight Eastern and Southeastern states: North Carolina, South Carolina, Virginia, Florida, New Jersey, Pennsylvania, Maryland and Georgia. North Carolina is home to the largest share of the portfolio with eight buildings totaling 1.2 million square feet. The buildings include a 450,000-square-foot regional operation center in Raleigh and a total of 616,000 square feet in Winston-Salem. The second largest share is inPennsylvania with five buildings that total 600,000 square feet and include an almost 500,000-square-foot regional operations center in Philadelphia.
“Acquisition of this geographically diverse portfolio fits perfectly into NFR’s investment strategy to acquire excellent properties leased to leading financial institutions that offer reliable cash flow and significant potential for appreciation,” says Vincent Pellerito, president and CEO of NFR.
Pellerito notes that Wells Fargo has a credit rating of “AA” by Standard & Poors and “A1” by Moody’s. “We also appreciate this opportunity to expand our relationship with Wells Fargo beyond our current ownership of its operation and data center in Hillsborough, Ore.,” says Pellerito.
Pellerito formed NFR in 2006. The company’s direct ownership and operating interests include 142 properties with more than 8.1 million square feet throughout the United States.
Oaktree priced its initial public offering at $43 a share on April 12, 2012. The company’s stock price closed at $51.31 per share on Monday.
—Rachel Goff