Franklin Buys Denver Property
Real estate investment trust (:REIT), Franklin Street Properties Corp. (FSP) disclosed the acquisition of an office property in Denver, Colo. for $217 million. The move reflects the company’s efforts to capitalize on the improving economy of the region.
Possessing 655,565 rentable square feet of space, this property is a 20-story, multi-tenant office building and retail plaza located at 1001 17th Street. It is currently 74% occupied, though leased 89% as around 100,000 rentable square feet of new leases are slated to begin in the last two months of 2013.
Denver has a diversified economy, which is fast expanding. It is experiencing business expansion by corporate and as such job is growing. To cater to this rising economy, the demand for real estates is well advancing, and with limited inventory, we believe that the real estate market will have higher occupancy rates and increased rentals in the upcoming years.
We believe that strategic acquisitions would help Franklin ride on the growth trajectory. In recent times, the company has acquired properties in its key markets. These include the purchase of an office property spanning 680,277 rentable square foot for $183 million in the central business district of Denver, Colo., as well as another office property having 621,007 rentable square foot of space worth $157.9 million in the mid-town submarket of Atlanta, Ga.
Notably, the 1001 17th Street property acquisition brings the total count of directly-owned properties of Franklin to 40. These properties constitute around 9,813,708 rentable square feet of space.
Last month, Franklin came up with second-quarter 2013 FFO (funds from operations) of 24 cents per share, beating the prior-year quarter figure of 23 cents. The results were aided by higher property income as a result of 3 acquisitions closed in the last 12 months and improved occupancy.
Based in Wakefield, Mass., Franklin focuses on investing in select urban infill and CBD office properties mainly in the top 5 markets of Atlanta, Dallas, Denver, Houston, and Minneapolis.
Franklin currently has a Zacks Rank #3 (Hold). Other REITs that are performing well and deserve a look include CubeSmart (CUBE), Douglas Emmett Inc. (DEI) and Highwoods Properties Inc. (HIW), all carrying a Zacks Rank #2 (Buy).
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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