An investment group has acquired a collection of ground-leases in New Jersey as part of a four-state, $97 million transaction with Brandywine Realty Trust.
The buyer, a joint venture led by Aventura, Florida-based Kawa, said it has also assumed $176 million of in-place financing as part of the acquisition. The portfolio consists of 58 office and industrial flex buildings that are home to more than 380 tenants across 3.9 million square feet, including defense contractors, tech companies and pharmaceutical firms.
The ground is leased to a Brandywine-controlled joint venture through a long-term, fee-simple master ground lease.
“Kawa and our investors were drawn to this opportunity for several reasons, including the consistent income in-place derived from a number of credit tenants operating within these properties and their locations in major metropolitan markets with strong demographics,” said Daniel Ades, Kawa’s managing partner. “Additionally, the diversification of asset classes throughout the 58 office and industrial properties speaks to the portfolio’s long-term continuity through changing economic cycles.”
Kawa did not disclose the individual locations of the properties in New Jersey or the other states, which include Virginia, Pennsylvania and North Carolina. The firm did note that the properties have collectively maintained an 89 percent occupancy rate since 2013.
It’s the latest in a series of ground lease acquisitions by the asset manager, which has completed 20 transactions to date. The deals carry an aggregate ground lease value of $964 million across asset classes such as retail, hospitality, office and solar energy production.
“Kawa has become very active in ground lease transactions in recent years and created a program that serves as a reliable vehicle for asset owners looking to free up liquidity and sponsors seeking to fund capital requirements at all stages of development — from acquisition to recapitalization and renovation,” Ades added. “In an environment post-COVID where financing may not be as readily available, Kawa continues to finance across the capital structure and be a true partner for ground lessors on transactions large and small.”
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