Keppel Pacific Oak US REIT (KORE) is proposing to acquire two office buildings located in Nashville and Denver for a total consideration of some US$105.1 million ($142.9 million), according to a July 28 announcement.
KORE’s manager also announced the launch of a private placement to raise US$65 million which will be used to partially fund the acquisition.
The Bridge Crossing building in Nashville, Tennessee is being acquired for US$46 million, while 105 Edgeview in Denver, Colorado is being acquired for $59.1 million. Both buildings are 100% leased as at June 30, including anchor tenants Comdata at Bridge Crossing and Gogo Business Aviation at 105 Edgeview.
According to the manager, Nashville and Denver are two of the six new favourite ‘boomtowns’ for young talent pool in the US, known also as 18-hour cities. Other 18-hour cities include Seattle and Austin, where KORE has presence in.
“The strategic addition of two quality assets in some of the strongest markets in the US reinforces our approach and drive to pursue long-term value that will support KORE’s growth and strengthen distributions to unitholders,” says David Snyder, CEO and CIO of the manager.
The proposed acquisitions are expected to be completed in 3Q2021.
See also: KORE’s 2Q DPU rises 1.3% y-o-y to 1.58 US cents
Post-acquisition, the pro-forma DPU for the FY2020 ended December is expected to increase by 0.8% from 6.23 US cents to 6.28 US cents. The pro-forma assets under management will grow by 8% to approximately US$1.4 billion.
Meanwhile the pro-forma portfolio committed occupancy as June 30 will increase from 90.5% to 91.2%. Following the completion of the proposed acquisitions, KORE’s portfolio will consist of 15 freehold office buildings and business campuses across nine key growth markets driven by innovation and technology in the US.
The manager intends to finance the proposed acquisitions through a combination of the private placement proceeds and debt.
The new units in KORE will be issued at a price range between 72 US cents to 74.3 US cents. DBS Bank and United Overseas Bank have been appointed as the joint bookrunners and underwriters.
In addition to the launch of the placement, the manager also announced on July 28 that KORE has obtained a new 5.5-year term loan facility in an aggregate principal amount of US$120 million.
Post-acquisition, KORE’s pro-forma aggregate leverage as at June 30 is expected to be 37.4%.
Units in KORE closed 1.5 cents or 1.91% higher at 80 US cents on July 28.
Photo: KORE
