Starwood Capital Group has acquired a US office and research & development portfolio totaling nearly 1.1 million square feet from Kilroy Realty for a total of $294.5 million. HFF, which marketed the properties on behalf of the Los Angeles-based REIT, also arranged a variable-rate acquisition loan on behalf of the buyer with Wells Fargo Bank and CIBC as the senior lenders and Goldman Sachs as the mezzanine lender.
The 12 buildings in the portfolio are located throughout the Sorrento Mesa and Rancho Bernardo submarkets of San Diego. The portfolio currently is 91 percent leased to tenants such as medical technology company Carefusion, online broker TD Ameritrade and energy supplier EDF Renewable Energy. The properties are relatively new constructions, with an average completion date of 2002.
Greenwich, Connecticut-based Starwood cited San Diego’s strong job growth and the potential of the portfolio to “generate strong cash-on-cash returns in a metro area with minimal new supply, strong fundamentals and high barriers to entry” in its reasons for making the acquisition. “This portfolio is well-positioned to capitalize on the robust recovery in the region,” added Christopher Graham, senior managing director at Starwood, in a statement.
The transaction follows a string of big retail deals completed by Starwood throughout 2013. Most recently, the firm purchased seven retail parks and shopping gallerias throughout Sweden for €348 million in November. In September, Starwood made headlines for its $1.64 billion acquisition of a shopping center portfolio from The Westfield Group. The firm’s most recent US office portfolio purchase occurred last January, with the acquisition of nine properties throughout the Sunbelt region from Wells Real Estate Investment Trust II for $260.5 million.