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TheStreet Open House

CapLease 2012 Acquisition Volume Grows To Over $185 Million

Stocks in this article: LSE

CapLease, Inc. (NYSE: LSE) announced today that it that it has entered into a binding contract to acquire a Class A office building located in the South Central United States for a total purchase price of $18.1 million. The Company’s average capitalization rate for the property will be about 9%. The Company expects to close the acquisition prior to year-end which will bring total acquisition volume for 2012 to more than $185 million.

The Company also announced that it has now closed on the previously announced acquisition of two adjacent single tenant office properties located in Englewood, Colorado outside of Denver for a total purchase price of $26.1 million. One property is an approximately 61,000 square foot single story office building leased to Comcast Corporation (S&P/Moody’s: BBB+/Baa1) for a term scheduled to mature in December 2020. The other property is an approximately 95,000 square foot three story office building leased to Pulte Mortgage LLC, as its corporate headquarters. Pulte Mortgage is the mortgage banking subsidiary of PulteGroup, Inc. (S&P/Moody’s: BB-/B1), the largest homebuilder in the United States. The Pulte lease is scheduled to mature in March 2020. The Company’s average capitalization rate across the two properties is approximately 9.1%.

In addition, the Company announced that it has obtained long-term financing of the approximately 145,000 square foot Class A office building located in the Energy Corridor of Houston, Texas which was purchased earlier this month for $35.5 million. CapLease secured a $19.5 million first mortgage loan, which equates to a 55% ratio of the loan principal to the Company’s purchase price. The non-recourse mortgage loan is from a major insurance company and has a coupon of 4.0%, with a ten year term.

Paul McDowell, Chairman and Chief Executive Officer, stated, “We have had a terrific year in acquisitions in 2012 growing the total portfolio by about 10%. These more than $185 million in transactions have added an additional 1.2 million square feet of very high quality assets bringing the portfolio total to more than 12 million square feet. Most importantly, at an average cap rate of about 8.5% and with very attractive financing terms, these acquisitions will be accretive to earnings and cash flow in the years ahead. We remain confident that we will continue our strong momentum into 2013 and beyond.”

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