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Griffin Capital Becomes Latest Non-Traded REIT Exploring Exit Options

Robert A. Stanger Hired as Financial Advisor for REIT's 18.9 Million-SF Office/Industrial Portfolio
September 14, 2016
Launched seven years ago, Griffin Capital Corp. said it is now exploring strategic options for its Griffin Capital Essential Asset REIT.

The El Segundo, CA-based firm has hired Robert A. Stanger & Co. as a financial advisor to assist in exploring strategic alternatives for the REIT, including potential liquidity opportunities.

While the REIT's board has been analyzing potential alternatives with several advisers for some time, it decided on an exclusive relationship with Stanger, which has assisted several other non-traded REITs over the last several years.

Discussions are in the preliminary stage and there is no assurance they will result in a transaction, the company added.

Separately, Robert A. Stanger is also working with a KBS Legacy Partners Apartment REIT to explore its liquidity options.

The publicly registered, non-traded Griffin Capital Essential Asset REIT owns 76 office and industrial distribution properties totaling 18.9 million rentable square feet in 20 states as of Aug. 1, representing total REIT capitalization of approximately $3.4 billion. The portfolio is approximately 99.5% occupied and leased.

Total revenue for its second quarter ended June 30 was $85.6 million, representing year-over-year growth of 39% for the same period in 2015. The REIT draws about 67% of that revenue from properties in California, Texas, Ohio, Illinois, Georgia and Colorado.

The REIT draws the ‘essential asset’ in its name from its investment focus on properties that it believes are essential to business operation of the tenant.

In its most recent acquisition this past April, Griffin Capital Essential Asset REIT acquired the remaining 90% ownership interest in a pair of Nashville buildings at 500 and 530 Great Circle Road leased to HealthSpring Inc. for $41.3 million.

Griffin Capital launched a second 'essential asset' REIT two years ago, which has a similar investment strategy, although it is currently only exploring options for the first one. Griffin Capital Essential Asset REIT II is much smaller, owning 26 buildings on 19 properties in 13 states, encompassing 4.1 million rentable square feet as off August 1.

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