Griffin Capital Essential Asset REIT II, Inc. has acquired a four building, Class B office campus in Hillsboro, Oregon leased in its entirety to Nike, Inc.
The purchase price for the Nike property was $45.5 million, plus closing costs. The capitalization rate for the Nike property is approximately 6.21%.
The property consists of three one-story buildings and one two-story building comprising 266,840 rentable square feet on a 22.93 acre site. The property is located in Hillsboro, Oregon, approximately 13 miles west of Portland and 5 miles northwest of Nike’s World Headquarters Campus in Beaverton, Oregon. Nike utilizes the property as a technology campus, housing employees focused on a variety of technology-related functions.
Since taking occupancy in 2008, Nike has invested significant capital towards improvements to the property, according to the buyer.
The Nike lease, as amended, is a triple-net lease with a remaining term of 4.6 years expiring in December 2020. The forward 12-months’ rent is approximately $2.8 million, with a rental rate increase effective January 2018 of 12.5% pursuant to a capped market rental rate adjustment. The Nike lease also includes one three-year renewal option at 95% of market rent for comparable properties, but in no event less than 105% or greater than 115% of the base rent in the year immediately preceding the option term.
Griffin Capital Asset Property Management II, LLC will be responsible for managing the Nike property and will be paid management fees in an amount of 3.0% of the gross monthly revenues collected from the Nike property. Griffin Capital Asset Property Management II, LLC has hired an unaffiliated third party to manage the day-to-day operations and will pay the third party a portion of the management fees unless such management fee can be recovered from the tenant.