A subsidiary of KBS Real Estate Investment Trust III, Inc. has acquired the Anchor Centre in Phoenix, AZ for $85.1 million plus closing costs.
The property consists of two office buildings on approximately 7.3 acres of land with 333,284 rentable square feet in the aggregate.
According to the property’s website, the previous Anchor Centre ownership entity was AG/DWC Anchor Centre, LLC, a joint venture between Angelo Gordon & Co. and DW Capital Partners, LLC (David Warren, Principal).
Anchor Centre was built in 1984 and renovated between 2011 and 2012. As of May 22, 2014, Anchor Centre was approximately 79 percent leased to 27 tenants. Amenities in the asset include an on-site deli, visitor parking, visitor parking access off Camelback Road, a fitness center, and an on-site conference room.
The current aggregate annual effective base rent, which is calculated as the annualized contractual base rental income (net of rental abatements), for the tenants of Anchor Centre is approximately $4.9 million. The current weighted-average remaining lease term for the tenants is approximately 5.9 years.
In connection with the acquisition, KBS entered into a three-year secured mortgage loan with for borrowings of up to $53.2 million secured by Anchor Centre. At closing, $50.0 million of the loan was funded and the remaining $3.2 million is available for future disbursements to be used for tenant improvements and leasing commissions. The Anchor Centre Mortgage Loan matures on June 1, 2017, with three one-year extension options, subject to certain terms and conditions contained in the loan documents.
The Anchor Centre Mortgage Loan bears interest at a floating rate of 150 basis points over one-month LIBOR. Monthly payments are initially interest-only.
Monthly payments during the second and third extension periods would consist of principal and interest, with monthly principal payments of $50,365. The Buyer has the right to repay the loan in part and in whole subject to an exit fee, in certain circumstances, and other fees, expenses and conditions, all as described in the loan documents.