Glenborough (NYSE:GLB)
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Glenborough Realty Trust (NYSE:GLB)(GLB PrA) announced
the acquisition of Capitol Place III in Washington DC. Capitol Place
III consists of a 12-story, Class "A" office building totaling 212,779
square feet located in Washington, D.C.'s Capitol Hill district. The
building is three blocks from the U. S. Capitol building; one block
from Union Station and is part of Capitol Place, one of the largest
projects in the District of Columbia. Capitol Place is a one million
square foot mixed-use project located on nearly an entire city block
bounded by New Jersey Avenue, F Street, and First Street, N.W. The
Capitol Place project is composed of four buildings -- three office
buildings and a full service, 264-room Washington Court Hotel-situated
around a central atrium. The purchase price was approximately $70
million or $329/SF.
Andrew Batinovich, President and CEO commented, "We continue to
build our presence in our top market Washington, D.C. which is
projected to increase to 27% of our portfolio's net operating income
with high quality assets in prime locations like Capitol Place III. We
have been successful at redeploying capital from our dispositions in
the Midwest to further focus our portfolio in our top markets."
Since the Capitol Place office buildings and the Washington Court
Hotel were developed at the same time, the hotel overlay zone allowed
the adjacent buildings (including Capitol Place III), to increase the
building height from 90 feet (the standard in the District of
Columbia) to 130 feet, a full four floors higher than the standard
office building in the area. This allows for spectacular views of the
U.S. Capitol and downtown Washington, D.C. The project also includes a
two-level underground parking garage.
The project is 100% leased to 8 tenants. The building's major
tenant is the Association of American Railroads ("AAR") who leases
135,202 square feet or 67% of the net rentable area through November,
2010. After relocating various back-office operations to Pueblo,
Colorado, AAR successfully sublet approximately 75% of their space to
13 tenants; AAR continues to occupy the other 25%.
Glenborough is a REIT which is focused on owning high quality,
multi-tenant office properties concentrated in Washington, D.C.,
Southern California, Boston, Northern New Jersey, and Northern
California. The Company has a portfolio of 57 properties encompassing
approximately 11 million square feet as of June 30, 2005.
FORWARD LOOKING STATEMENTS: Certain statements in this press
release are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and the Securities Exchange Act of
1934, including Mr. Batinovich's statement that the Washington, D.C.
market is projected to increase to 27% of our portfolio's net
operating income. All forward-looking statements are based on
information available to us on the date hereof. Because these forward
looking statements involve risk and uncertainty, there are important
factors that could cause our actual results to differ materially from
those stated or implied in the forward-looking statements. Those
important factors include: the failure of the economy to continue its
expansion; the failure of the office market to grow with a growing
economy; downward changes in market rental rates for office space,
especially in the Washington, D.C. area; lower than expected retention
of existing tenants, especially in the Washington, D.C. area; our
inability to locate suitable buyers for our listed assets who are
ready, willing and able to close transactions at the sales price we
anticipate; and our inability to locate and acquire suitable property
at reasonable prices in our core markets, especially the Washington,
D.C. area. Given these uncertainties, readers are cautioned not to
place undue reliance on such statements. We assume no obligation to
update or supplement any forward looking-statement. Additional
information concerning factors that could cause results to differ can
be found in our filings with the SEC including our report on Form 10-K
for the year ended December 31, 2004 and our quarterly report on Form
10-Q for the period ended March 31, 2005.