RREEF Real Estate, the real estate management arm of Deutsche Bank, has agreed to a huge $520 million deal to sell a portfolio of offices and warehouses in San Francisco Bay.
The company sold the buildings to Glendale, California-based PS Business Parks Inc., according to statement made by Deutsche Bank yesterday, reported in Business Week. As part of the deal, PSB will assume $250 million worth of debts.
Business Week reports that the deal was made amid a climate of rising demand for occupancies in the San Francisco Bay and Silicon Valley areas, especially from technology firms. Apple Inc. and Google Inc. have together leased around 4 million Sq. Ft over the last 12 months.
According to Business week, the total portfolio has an 82% occupancy at present, and encompasses more than 5.3 million sq. ft of space. 45% of the RREEF buildings sold were warehouses, while the remainder has the scope to be used as either warehouses or offices.
Brian McAuliffe, RREEF Real Estate’s chief of American transactions, had the following to say:
“The combination of strong demand and limited availability of core real estate assets in the San Francisco Bay Area has resulted in attractive pricing.”
Joseph D. Russell Jr., CEO and President of PS Business Parks, made a separate statement, saying:
“This portfolio acquisition significantly enhances PSB’s presence in Northern California, providing a strong concentration of parks in markets that are poised for continued recovery.”
PS Business Parks now owns a total of 7.2 million sq. ft. of industrial space in Northern California, which comes to around 26% of its total real estate portfolio. The company revealed that its total assets were worth $58.5 billion last September.