WAKEFIELD, Mass.--(BUSINESS WIRE)--Franklin Street Properties Corp. (the “Company”, “FSP”, “our” or “we”) (NYSE MKT: FSP), a real estate investment trust (REIT), has acquired the Plaza Seven Office Tower located at 45 South Seventh Street in downtown Minneapolis, Minnesota. Plaza Seven is a 36-story, Class “A” mixed-use tower that includes hotel, office and parking components and is strategically positioned within the core of the Minneapolis Central Business District. FSP acquired the office and underground parking components of Plaza Seven. The office component contains approximately 325,796 rentable square feet and is located primarily on floors 18-36. A recently rebranded approximately 360-room Radisson Blu hotel is located on floors 1-17 and was not part of our acquisition.
The gross purchase price of the Plaza Seven Office Tower and the underground parking garage was $82 million, or approximately $252 per rentable square foot. The Company anticipates planned building capital investments (excluding leasing costs) of approximately $1.9 million over the next four years. Plaza Seven Office Tower is currently approximately 97% leased to a diverse group of tenants with staggered lease expirations, with the largest being PricewaterhouseCoopers LLP for approximately 20% of the rentable square footage until January 2029. Approximately 30% of the Plaza Seven Office Tower’s leases expire over the next three years at rents that we believe average approximately 15 – 20% below comparable current market rents. We believe that these upcoming lease expirations provide us with a near term potential opportunity to add value by marking leases to market.
The Company funded this acquisition with proceeds from non-core dispositions, loan repayments and borrowings under its revolving credit facility. No debt was assumed in connection with this acquisition.
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About Franklin Street Properties Corp.
Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on investing in institutional-quality office properties in the U.S. FSP’s strategy is to invest in select urban infill and central business district (CBD) properties, with primary emphasis on our top five markets of Atlanta, Dallas, Denver, Houston, and Minneapolis. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes. To learn more about FSP please visit our website at www.franklinstreetproperties.com.
Statements made in this press release that state FSP’s or management’s intentions, beliefs, expectations, or predictions for the future may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This press release may also contain forward-looking statements based on current judgments and current knowledge of management, which are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements. Investors are cautioned that our forward-looking statements involve risks and uncertainty, including without limitation, economic conditions in the United States, disruptions in the debt markets, economic conditions in the markets in which we own properties, risks of a lessening of demand for the types of real estate owned by us, changes in government regulations and regulatory uncertainty, uncertainty about governmental fiscal policy, geopolitical events and expenditures that cannot be anticipated such as utility rate and usage increases, unanticipated repairs, additional staffing, insurance increases and real estate tax valuation reassessments. See the “Risk Factors” set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2015, as the same may be updated from time to time in subsequent filings with the United States Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We will not update any of the forward-looking statements after the date of this press release to conform them to actual results or to changes in our expectations that occur after such date, other than as required by law.