Atlanta, GA-based Piedmont Office Realty Trust (PDM) announced the acquisition of a Class-A office property in Burlington, MA through an off-market transaction from The Gutierrez Company. The acquisition affirms the company’s focus on expansion in the attractive submarkets of Boston.
This 5 Wall Street property is a 6-story, 181,680 square foot office building and is fully leased to three tenants. It is not the only asset that the company has acquired in this area. In 2013, Piedmont acquired another Class-A project– 5 & 15 Wayside Road – located in Burlington.
The latest acquisition is a strategic fit for Piedmont as the property provides easy accessibility to its tenants to the Route 128 corridor as well as more than 300,000 square feet of retail, entertainment and dining destinations within walking distance. Moreover, the purchase of this premium asset below its current replacement cost in the attractive Burlington submarket makes it an opportunistic one.
Notably, the recent buyouts coupled with the company’s current properties in the Boston Metro area brings the company’s total square feet of space to around 1.5 million in this region. Incidentally, all of these spaces are 100% leased.
As a matter of fact, the office market fundamentals have started to benefit from a recovery in the economy, growth in jobs and lower new supply. In recent years, notable job growth has taken place in the Greater Boston office market and this expansion has mainly been driven by the technology and healthcare industry sectors. The 5 Wall Street acquisition would help the company in its mission to become a major REIT participant in the Route 128 North submarket.
Piedmont currently has a Zacks Rank #3 (Hold). However, investors interested in the REIT industry may consider stocks like Chatham Lodging Trust (CLDT), Parkway Properties Inc. (PKY) and Terreno Realty Corp. (TRNO). All these stocks carry a Zacks Rank #1 (Strong Buy).