NAPERVILLE, ILL. — Select Income REIT (NYSE: SIR) has acquired 1415 West Diehl Road, a five-story, Class A office property for approximately $187.5 million, excluding closing costs, in a sale-leaseback transaction. Tellabs Inc., an optical networking firm, entered into a 15-year lease for use of the property as its corporate headquarters.
The cap rate, based on current in-place net operating income, including straight-line rents, is approximately 8.7 percent.
The property, constructed in 2001 and located in Naperville’s East West Corridor adjacent to Interstate 88, is approximately 820,000 square feet. Its amenities include parking structures, a Starbucks, fitness and convenience centers, and a convenience store.
Naperville, located 30 miles west of Chicago, is frequently listed among Money magazine’s “100 Best Places to Live.” It has been awarded the highest bond rating available, the AAA rating, by both Standard & Poor’s and Moody’s for the past 19 years.
Select Income REIT, based in Newton, Mass., funded the purchase with cash on hand and borrowings under its unsecured revolving credit facility.
“We are excited to have identified and executed this sale-leaseback transaction with a terrific long-term tenant,” says David Blackman, president and COO of Select Income REIT. “1415 West Diehl Road is a great asset in a favorable location with outstanding potential to appreciate in value and deliver superior returns.”
The stock price of Select Income REIT closed at $30.68 per share on Monday, April 7, up from $27.44 on April 5, 2013.
— Scott Reid