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Griffin Capital Essential Asset REIT Acquires LPL Campus in South Carolina

December 4, 2017

Griffin Capital Essential Asset REIT Acquires LPL Campus in South Carolina

December 4, 2017 | James Sprow | Blue Vault

Griffin Capital Company, LLC announced on December 4 that their sponsored nontraded REIT program Griffin Capital Essential Asset REIT, Inc. completed the acquisition of the LPL Financial Carolinas Corporate Campus at a purchase price of $130 million. The two-building property is leased in its entirety to LPL Holdings, Inc. with approximately 19 years of remaining lease term and 1.75% annual base rental rate increases. The state-of-the-art campus is one of LPL’s three major national offices and is the firm’s largest by headcount and square footage, with nearly 2,000 total employees occupying over 450,000 square feet.

Constructed in 2016 and located 17 miles south of Charlotte in Fort Mill, South Carolina, the property consists of two adjacent, six-story, Class A office buildings totaling approximately 452,000 square feet of rentable area, as well as a six-level structured parking deck with 1,913 spaces situated on two parcels totaling 16.3 acres. The property’s key amenities include a full-service cafeteria with indoor and outdoor seating, a fitness center, an outdoor putting green, community garden and walking trails. The property is located within Fort Mill’s award-winning Kingsley master-planned development, which offers an additional high-quality restaurant, service retail, and hotel amenities. The property is less than 30 minutes drive from downtown Charlotte and about 15 minutes from high-end housing in suburban Charlotte.

Commenting on the acquisition, Don Pescara, Griffin Capital’s Managing Director of Acquisitions, stated, “We’ve been focused on the greater Charlotte metropolitan area due to its well-diversified economy and significant growth over the past two decades. The acquisition of the LPL Financial Campus adds to our portfolio two well-located, high-quality buildings leased to a premier tenant.”

Michael J. Escalante, Griffin Capital’s Chief Investment Officer, added, “The assets meet our criteria of investing in income-generating properties leased to established corporate tenants on a long-term basis. Given that these assets are critical to LPL Financial’s ongoing operations, they represent the type of investment that fits well with our own investing objectives as well as those of Griffin Capital Essential Asset REIT, Inc.”

The LPL Financial Campus was acquired with 1031 exchange proceeds from the disposition of the DreamWorks Animation’s Headquarters and Studio Campus, which the REIT sold on November 21st.

As of September 30, 2017, Griffin Capital Essential Asset REIT’s portfolio consisted of 75 properties with aggregate GLA of $18,907,400 square feet. The portfolio was 96.6% leased. The DreamWorks Animation’s Headquarters in Glendale, California, was sold on November 21 for $290 million. That property had been acquired in 2015 for $221 million. The REIT also sold One Century Place in Nashville, Tennessee on October 19 for $100 million. The property was purchased in 2013 for $70 million.

In addition, the company’s board of directors urged its stockholders to reject an unsolicited offer from MacKenzie Capital Management LP and its affiliates to purchase up to 1.0 million shares of the company’s common stock at $6.89 apiece.

The company argued, among other things, that MacKenzie’s offer price is less than the existing and potential long-term value of the shares.

Griffin Capital Essential Asset REIT, Inc. is a publicly-registered non-traded REIT with a portfolio, as of September 30, 2017, of 74 office and industrial properties totaling 18.8 million rentable square feet, located in 20 states, representing total REIT capitalization of approximately $3.4 billion. Griffin Capital Essential Asset REIT, Inc. is one of several REITs sponsored or co-sponsored by Griffin Capital. Other currently active nontraded REIT programs include Griffin American Essential Asset REIT II, Griffin-American Healthcare REIT III, and Griffin-American Healthcare REIT IV. Griffin-American Healthcare REIT IV is currently raising capital via a public offering and had completed $327 million in acquisitions year-to-date as of September 30. On November 1, 2017, the REIT completed the acquisition of a nine-property senior housing portfolio in Central Florida for approximately $109.5 million. 

About Griffin Capital

Griffin Capital is a leading alternative investment asset manager with approximately $9.6 billion in assets under management as of September 30, 2017. Founded in 1995, the privately held firm is led by a seasoned team of senior executives who collectively have executed more than 650 transactions valued at over $22 billion.

The firm manages, sponsors or co-sponsors a suite of carefully curated, institutional quality investment solutions distributed by Griffin Capital Securities, LLC to retail investors through a community of partners, including independent and insurance broker-dealers, wirehouses, registered investment advisory firms and the financial advisors who work with these enterprises.

Additional information is available at www.griffincapital.com.

 

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Gregory De Jong, CFP, Co-Founder of Paragon Advisors, LLC.
July 7, 2015

Blue Vault is just what advisors need to size up the different offerings in the nontraded REIT market. Just as importantly, it’s what the industry needs to encourage best practices among REITs.