Oaktree Funds & National Financial Realty Acquire Wells Fargo Bank Leased Properties

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As reported by Investment Weekly News, an affiliate of Oaktree Capital Management, LP (Oaktree) in a partnership with National Financial Realty, Inc. (NFR), a privately held investment company based in Los Angeles, have acquired a portfolio with 40 office buildings for $240 million.  The portfolio consists of 3.4 million square feet of office buildings of which 90 percent is leased by Wells Fargo.  They purchased the portfolio from First State Investors B, LP.  This acquisition establishes NFR as the largest privately-held investment firm who is focused on acquiring and managing properties that are leased to regulated financial institutions. 

John Brady, managing director and head of global real estate for Oaktree said, “This off-market acquisition, principally backed by 11 years of Wells Fargo credit, at a 50 percent discount to replacement cost, is another example of Oaktree’s commitment to relationship based transactions with well-positioned strategic operating partners like NFR, in addition to lenders and borrowers in need of capital solutions.” 

Vincet E. Pellerito, president and CEO of NFR said, “Acquisition of this geographically diverse portfolio fits perfectly into NFR’s investment strategy to acquire excellent properties leased to leading financial institutions that offer reliable cash flow and significant potential for appreciation.”  He also stated that Wells Fargo has a Standard & Poor’s credit rating of “AA” and a Moody rating of “A1.”  Pellerito also said, “We also appreciate this opportunity to expand our relationship with Wells Fargo beyond our current ownership of its operation and datacenter in Hillsborough, Oregon.” 

Wells Fargo has a long-term lease on the 40 buildings which include critical operations facilities and branch offices for North Carolina, South Carolina, Virginia, Florida, New Jersey, Pennsylvania, Maryland, and Georgia.  The largest share of the portfolio is located in North Carolina.  The North Carolina portion of the portfolio has eight buildings with a total of 1.2 million square feet which includes the Raleigh regional operation center of 450,000 square feet and the Winston-Salem location of 616,000 square feet.  The second largest portion of the portfolio is the Pennsylvania location that has five buildings totaling 600,000 square feet which includes the regional operations center of almost 500,000 square feet. 

Pellerito formed NFR in 2006.  Pellerito has 20 year experience in structuring commercial real estate transactions and has structured more than $2.2 billion in global commercial real estate transactions.  The company owns and operates 142 properties totaling more than 8.1 million square feet all over the US. 

Oaktree is a leading global investment management firm.  The firm has $77.1 billion worth of assets under its management as of year-end 2012. 

Source: www.reis.com

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