Article: Wells buying Cleveland's Key Center (from STRS) for $312.25 million
December 15, 2005
Written by Mark Heschmeyer
Reconstituted ownership will give Wells control over 57-story office and hotel complex
Richard E. Jacobs Group has found a buyer for its behemoth Key Center project in Cleveland. The 1.36 million-square-foot office building, 403-room Marriott hotel and 982-space parking garage will be sold to affiliates of Wells Real Estate Investment Trust II for $312.25 million.
Wells has already paid a $20 million escrow deposit and expects the deal to close Dec. 23, according to information it reported in a securities filing.
As opposed to a direct sale of the property, the deal is being treated as a recapitalization and reconstitution of ownership. The parties involved in the agreement include Richard E. Jacobs Group, affiliates of Wells Real Estate Investment Trust II and the State Teachers Retirement Board of Ohio.
It could not be determined how the ownership interests would be divvied up. However, when the closing occurs and the entities that own the interests in the Key Center Property are recapitalized and reconstituted, Wells will be entitled to all the benefits of ownership of the Key Center property. That will include the right to receive all net cash flow from operations.
Key Center has been on the market for most of the year.
The Key Tower office building is approximately 93% occupied with asking rents in the building averaging about $31/square foot. The building at 57 stories tall is considered the tallest office building between New York City and Chicago.
KeyCorp bankholding company is the primary tenant in the tower. Key leases approximately 695,000 square feet of the complex, encompassing the first 23 floors, the 28th floor and the 54th through 56th floors on a lease that expires in April 2014.
The Marriott hotel stands at 25 stories and contains approximately 385,000 square feet with full-size ballroom and extensive meeting/catering facilities.
Wells has already paid a $20 million escrow deposit and expects the deal to close Dec. 23, according to information it reported in a securities filing.
As opposed to a direct sale of the property, the deal is being treated as a recapitalization and reconstitution of ownership. The parties involved in the agreement include Richard E. Jacobs Group, affiliates of Wells Real Estate Investment Trust II and the State Teachers Retirement Board of Ohio.
It could not be determined how the ownership interests would be divvied up. However, when the closing occurs and the entities that own the interests in the Key Center Property are recapitalized and reconstituted, Wells will be entitled to all the benefits of ownership of the Key Center property. That will include the right to receive all net cash flow from operations.
Key Center has been on the market for most of the year.
The Key Tower office building is approximately 93% occupied with asking rents in the building averaging about $31/square foot. The building at 57 stories tall is considered the tallest office building between New York City and Chicago.
KeyCorp bankholding company is the primary tenant in the tower. Key leases approximately 695,000 square feet of the complex, encompassing the first 23 floors, the 28th floor and the 54th through 56th floors on a lease that expires in April 2014.
The Marriott hotel stands at 25 stories and contains approximately 385,000 square feet with full-size ballroom and extensive meeting/catering facilities.
posted by Kathie Bracy at 11:07 AM
<< Home