RREEF Property Trust Provides Pro Forma for Industrial Building Acquisition in Redmond, WA
December 30, 2019
In an 8-K/A filing on December 27, RREEF Property Trust provided a Pro Forma Consolidated Balance Sheet that assumed the acquisition of a Redmond, Washington industrial property occurred on September 30, 2019.
On December 17, 2019, RREEF Property Trust, Inc. (the “Company”), a nontraded REIT, acquired Seattle East Industrial, a 210,321 square foot industrial building situated on 23.4 acres located in Redmond, Washington (“Seattle East Industrial”). The purchase price for Seattle East Industrial was $81.5 million, exclusive of closing costs. Seattle East Industrial is leased to one tenant on a triple-net basis and is managed by a third party manager.
In an 8-K filed on December 19, the Company reported the acquisition and gave details about the transaction. Seattle East Industrial is approximately one mile from the State Route 520 highway, providing direct access to Interstates 405, 90 and 5 which connect to greater Puget Sound. Seattle East Industrial is 100% occupied by FedEx Ground Package System, Inc., a wholly-owned subsidiary and a reportable segment of FedEx Corporation, a public company (NYSE: FDX). The lease has a remaining term of approximately 8.5 years with two five-year extension options.
The Company funded the equity portion of the acquisition with cash on hand and a borrowing of $35.6 million from the Company’s existing line of credit with Wells Fargo Bank utilizing available borrowing capacity from previously owned properties. A wholly-owned subsidiary of the Company entered into a loan agreement providing for a $45.14 million non-recourse loan with an interest rate of 3.87% with monthly interest-only payments for the entire 10-year term.
According to a December 19 press release:
“The LEED Silver-certified distribution facility houses a custom, built-in-place conveyor system tasked with sorting and organizing packages for shipment in an efficient and cost-effective manner. The property’s close proximity to Seattle’s major population centers, SeaTac Airport and the Port of Seattle makes this location highly desirable among large distribution tenants, while high barriers to entry have limited development in this industrial node. Excess land dedicated to parking and trailer storage further strengthens the center’s market position as a best-in-class, infill distribution building.”
“The addition of a 100% leased industrial asset with 8.5 years of remaining lease term further strengthens the income profile and core nature of the portfolio.”
“Acquiring a well-located distribution facility in one of the busiest shipment corridors along the West Coast is aligned with our portfolio allocation strategy for the fund,” said Todd Henderson, Chairman of the Board of RREEF Property Trust and Head of Real Estate, Americas at DWS. “We continue to remain overweight to the industrial sector as we still believe that strong market fundamentals in the U.S. are expected to remain due to low current vacancy rates, a disciplined construction pipeline and the proliferation of e-commerce.”
Source: SEC
