Griffin Capital Essential Asset REIT Reports Second Quarter 2013 Results
EL SEGUNDO, Calif. (August 14, 2013) – Griffin Capital Essential Asset REIT, Inc. (the “Essential Asset REIT”) announced today its operating results for the quarter ended June 30, 2013.
“The second quarter of 2013 picked up right where the first quarter left off: further diversification of Essential Asset REIT’s portfolio via the addition of high quality properties occupied by creditworthy entities. I am pleased our acquisitions team was able to identify and close properties located in strong markets like Houston, Charlotte and Phoenix, where our occupants include iconic, blue chip companies like United Technologies, Avnet, Connecticut General Life Insurance Company, and Schlumberger,” stated Kevin Shields, chairman and chief executive officer of the Essential Asset REIT. “With these recent acquisitions, our portfolio has eclipsed half a billion dollars. We believe that scale, together with growing diversification by tenant, tenant business, lease duration and property location, continues to enhance the value of our portfolio for the future.”
“All of these properties possess ‘business essential’ elements, characteristics that we believe will make the tenants more likely to remain in occupancy long term,” added David Rupert, president of the Essential Asset REIT. “For example, United Technologies’ building is the global headquarters for their newly-established subsidiary UTC Aerospace Systems, and Schlumberger’s building serves as one of only two financial hubs worldwide. Longevity of occupancy contributes to stability of cash flow for the Essential Asset REIT, which is what we are seeking for our shareholders.”
Highlights and Accomplishments in the Second Quarter of 2013
- During the second quarter of 2013 we acquired four institutional-quality properties, consisting of over 800,000 square feet for approximately $175 million of acquisition value. Each property is either leased to an investment grade rated tenant, or the lease is guaranteed by an investment grade-rated company, or the parent organization of the tenant is investment grade rated, including: Schlumberger Technology Corporation, United Technology Corporation, Avnet, and CIGNA.
- Our portfolio grew by 66% from December 31, 2012 through June 30, 2013 and now consists of 20 assets, which are 100% leased and comprise approximately 4.3 million square feet. The total capitalization1 of our properties is over half a billion dollars.
- A substantial amount of the portfolio net rental revenue is generated by investment-grade rated companies that lease the property directly, have a lease guaranteed by an investment grade-rated company, or have a parent company that is investment grade-rated.
- As of June 30, 2013, the weighted average remaining lease term is 8.54 years with average annual rental rate increases of approximately 2.3%.
- On June 13, 2013, we amended and restated our KeyBank credit facility, which included a reduction to the interest rate of approximately 50 basis points, with further reductions, in 25 basis point increments, as our leverage ratio decreases. Other amendments were made to the borrowing base availability calculation and debt covenant requirements.
- Modified funds from operations, or MFFO, as defined by the Investment Program Association (IPA), was $4.26 million for the quarter, representing year-over-year growth of approximately 123% for the same quarter 2012. Funds from operations, or FFO, as defined by the National Association of Real Estate Investment Trusts (NAREIT), equaled approximately $(0.8) million, compared with $1.2 million for the same quarter 2012. (Please see financial reconciliation tables and notes at the end of this release for more information regarding MFFO and FFO.)
About Griffin Capital Essential Asset REIT and Griffin Capital Corporation
Griffin Capital Essential Asset REIT, Inc. is a publicly-registered non-traded REIT with a portfolio that as of June 30, 2013 included 20 office and industrial distribution properties totaling approximately 4.3 million rentable square feet and total capitalization in excess of $500 million. The REIT’s sponsor is Griffin Capital Corporation (“Griffin Capital”), a privately-owned real estate company headquartered in Los Angeles. Led by senior executives, each with more than two decades of real estate experience collectively encompassing over $16 billion of transaction value and more than 650 transactions, Griffin Capital and its affiliates have acquired or constructed over 17 million square feet of space since 1996. Griffin Capital and its affiliates currently owns, manages and/or sponsors a portfolio consisting of over 15.7 million square feet of space, located in 28 states and representing approximately $2.7 billion in asset value. Additional information about Griffin Capital is available at www.griffincapital.com.
This press release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” or other similar words. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, but are not limited to: uncertainties relating to changes in general economic and real estate conditions; uncertainties relating to the implementation of our real estate investment strategy; uncertainties relating to financing availability and capital proceeds; uncertainties relating to the closing of property acquisitions; uncertainties relating to the public offering of our common stock; uncertainties related to the timing and availability of distributions; and other risk factors as outlined in the REIT’s prospectus, as amended from time to time. This is neither an offer nor a solicitation to purchase securities.