Prudential sells $112m Washington DC office

Prudential Real Estate Investors has disposed of a 570,000-sq-ft office to US REIT KBS. It comes as the real estate investment firm also repaid $145m of a $616m credit facility with JV partner Kimco Realty.

Prudential Real Estate Investors has sold a 570,000-square-foot office property in Washington, DC to US REIT KBS for $112 million.

The Parsippany, New Jersey-based fund manager bought the Class A Willow Oaks Corporate Center in Merrifield, Fairfax County, Virginia in December 2005 for around $107 million, according to data provider Real Capital Analytics.

8270 Willow Oaks, one
of three offices bought
by KBS

Today, KBS confirmed it had acquired the three-building office portfolio for $112.2 million, equivalent to $196.78 per square foot. The deal closed in late August, the statement added.

The office complex is currently 93 percent leased, with KBS senior vice present Robin Burke saying the Washington, DC area was a market with “above-average potential” owing to growing government-related services.

PREI chief executive officer Allen Smith said last month the firm would look to sell $1 billion of property during 2009 as it sought to ease liquidity issues in some of its open and closed-ended funds and as part of a general disposition strategy.

Allen said at the time PREI tried to stay in the market selling properties “in good and bad times”, but added that with fund level liquidity restricted to property cash flow and property sales, most firms would look to sell some assets.

It comes as PREI and another joint venture partner, US REIT Kimco Realty Corporation, repaid $145 million of a $616 million credit facility. The debt pay-down was funded with $117 million of capital contributions, 85 percent of which came from PREI funds, and $28 million following the sale of three assets from the JV.

The venture will continue to sell assets over the next year as it looks to repay the remaining $471 million on the facility, which is due 26 August, 2010.