KBS REIT III Agrees to Pay $170.5M for 222 S. Main Street in Salt Lake City

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KBSIII 222 Main, LLC, a subsidiary of KBS Real Estate Investment Trust III Inc., has agreed to acquire 222 S. Main Street in Salt Lake City, Utah for $170.5 million, plus closing costs.

The seller is Bentall Kennedy (U.S.) Limited Partnership.

The office property contains 426,657 rentable square feet and is located on approximately 1.6 acres of land. Tenants in the building include Robert W. Baird & Co. Inc., The Goldman Sachs Group, Inc., CBRE, Inc. and Phillips Edison & Company, Ltd.

The closing of this transaction is set to take place on February 18, 2014. The buyer has the option to extend the Closing to February 28, 2014.

Cushman & Wakefield served as the broker on this deal, according to the purchase and sale agreement.

222 Main was built in 2009. As of February 1, 2014, 222 Main was approximately 85% leased to 16 tenants. The aggregate annualized base rent for the tenants of 222 Main is approximately $13.2 million. As of February 1, 2014, the weighted-average remaining lease term for the tenants was approximately 9.0 years. As of February 1, 2014, the average annualized base rent per square foot was $36.35 per square foot.

KBS REIT III says two tenants occupy more than 10% of the total rentable square feet of the building.

The first tenant, which is in the investment banking industry, occupies 176,373 rentable square feet, or approximately 41% of the total rentable square feet. Its lease expires on May 31, 2025, with three five-year extension options. The tenant also has a one-time option to terminate its entire lease or a portion of its lease, in whole-floor segments, effective May 31, 2021, upon submitting a written notice of termination no later 12 months prior to the lease expiration date and no earlier than 24 months prior to such date, subject to a termination fee.

As of February 1, 2014, the annualized base rent for this tenant was approximately $6.3 million, the remaining lease term was approximately 11.3 years and the average annualized base rent per square foot was $35.54 per square foot.

The second tenant is in the legal services industry. This tenant occupies 76,257 rentable square feet, or approximately 18% of the total rentable square feet. Its lease expires on May 31, 2025, with three five-year extension options. As of February 1, 2014, the annualized base rent for this tenant was approximately $3.3 million, the remaining lease term was approximately 11.3 years and the annualized base rent per square foot was $43.23 per square foot.