WAKEFIELD, Mass.--(BUSINESS WIRE)--Franklin Street Properties Corp. (NYSE MKT: FSP),a real estate investment trust (REIT),has acquired the Plaza Seven Office Tower located at 45 South Seventh Street in downtown Minneapolis, Minnesota. Plaza Seven is a 36-story, Class “A” mixed-use tower that includes hotel, office and parking components and is strategically positioned within the core of the Minneapolis Central Business District. FSP acquired the office and underground parking components of Plaza Seven. The office component contains approximately 325,796 rentable square feet and is located primarily on floors 18-36. A recently rebranded approximately 360-room Radisson Blu hotel is located on floors 1-17 and was not part of our acquisition.
The gross purchase price of the Plaza Seven Office Tower and the underground parking garage was $82 million, or approximately $252 per rentable square foot. The Company anticipates planned building capital investments (excluding leasing costs) of approximately $1.9 million over the next four years. Plaza Seven Office Tower is currently approximately 97% leased to a diverse group of tenants with staggered lease expirations, with the largest being PricewaterhouseCoopers LLP for approximately 20% of the rentable square footage until January 2029. Approximately 30% of the Plaza Seven Office Tower’s leases expire over the next three years at rents that we believe average approximately 15 – 20% below comparable current market rents. We believe that these upcoming lease expirations provide us with a near term potential opportunity to add value by marking leases to market.
The Company funded this acquisition with proceeds from non-core dispositions, loan repayments and borrowings under its revolving credit facility. No debt was assumed in connection with this acquisition.
About Franklin Street Properties Corp.
Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on investing in institutional-quality office properties in the U.S. FSP’s strategy is to invest in select urban infill and central business district (CBD) properties, with primary emphasis on our top five markets of Atlanta, Dallas, Denver, Houston, and Minneapolis. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes. To learn more about FSP please visit our website at www.franklinstreetproperties.com.
