SINGAPORE (EDGEPROP) - Ascendas Funds Management, the manager of Ascendas REIT, has announced a proposed acquisition of two office properties in San Francisco in the US. The total purchase consideration amounts to US$560.2 million ($768 million). The properties are located at 510 Townsend Street and 505 Brannan Street in the South of Market (SoMa) submarket.
“This acquisition allows us to plant a foothold in San Francisco, one of the most dynamic and progressive cities in the US. The properties are newly completed in 2017 and are fully leased to two high quality technology tenants,” says William Tay, CEO of the manager.
According to the fund manager, the office buildings are in a top performing submarket that also houses about 85% of the technology companies in San Francisco. The city is also a hub for technology companies and life sciences.
The property at 510 Townsend Street is fully leased to Stripe, a private global technology company that builds and licenses online payment infrastructure. The company has a remaining lease term of seven years. The office building at 505 Brannan Street is fully occupied by Pinterest, which has its headquarters in the property. The company has a remaining lease term of 12.4 years.
The structure of both leases is triple-net and have built-in rent escalations of 2% to 3% per annum. After the completion of the proposed acquisition, San Francisco will account for 37% of Ascendas REIT’s US portfolio, which comprises 15% of the REIT’s global portfolio.