Singapore-listed Manulife US REIT has offered a three-building workplace park in Oregon for $33.5 million as it stays in ongoing discussions with South Korea’s Mirae Asset Global Investments on a possible sale of a stake within the belief’s supervisor.
The divested property in Hillsboro, west of Oregon’s largest metropolis of Portland, is a 132,851 sq. foot (12,342 sq. metre) campus comprising three flex-office buildings constructed between 1986 to 1995 and refurbished in 2015, 2017 and 2020, MUST’s supervisor mentioned Wednesday in an SGX submitting. The purchaser of the advanced, recognized as Tanasbourne, was recognized as the US-based John Hancock Life Insurance Company.
In a separate submitting, the supervisor mentioned the disposal was a part of the REIT’s ongoing strategic overview and represents continued efforts to determine asset disposition alternatives inside the current portfolio with plans to redeploy proceeds into debt reimbursement or capital expenditure.
“Asset dispositions continue to be challenging with the prevailing negative sentiment around the US office sector,” mentioned Tripp Gantt, the CEO of the supervisor. “Factors such as the rising interest rate environment, uncertainty around tenant space requirements as well as limited buyer access to credit financing have contributed to low levels of capital market activity in the US office sector which makes sizeable asset dispositions difficult, especially in the more challenged submarkets.”
Loss-Making Disposal
The agreed consideration for Tanasbourne was arrived at by taking the upper of two unbiased valuations by JLL and Colliers, which estimated the property at $33.5 million and $32.36 million, respectively.
The sale and buy settlement was entered into on Wednesday and the deal closed on the identical day, the supervisor mentioned.
John Hancock paid $252 per sq. foot of workplace area for its new acquisition. After taking into consideration divestment-related bills, MUST’s internet proceeds from the disposal amounted to $33.1 million, with a ensuing internet lack of $400,000.
The divestment of Tanasbourne, MUST’s lowest-valued asset, leaves the belief with 11 US workplace properties valued at $1.9 billion. The highest-valued remaining asset is the $292 million Michelson, a 19-storey workplace constructing offering 534,435 sq. toes of internet leasable space in Irvine, California.
Sponsor Eyes New Units
Gantt mentioned talks are persevering with with Seoul-based Mirae on the potential acquisition of shares in MUST’s supervisor and the subscription of recent models within the belief. The REIT’s sponsor, Canadian monetary big Manulife, can also be contemplating a attainable subscription for new models to keep up its current 9.1 % unitholding following the issuance of recent models to Mirae.
“The Mirae transaction does not involve Mirae acquiring the sponsor’s existing unitholdings in Manulife US REIT,” the CEO mentioned.
In a response to SGX queries made with regard to what the change termed “unusual price movements” in MUST’s traded models on Tuesday, Gantt mentioned the supervisor was in compliance with itemizing guidelines.
The models are down almost 72 % in value in contrast with year-earlier ranges, and the supervisor reported in December that the belief’s portfolio valuation had declined by 10.9 % in 2022.
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