Global US Real Estate Fund concludes fourth acquisition

Mr. Sameer A. Al-Gharaballi, Executive Vice President at Global -the fund's manager-said that it finalized the purchase of the third Medical Office Building to become the fourth property in its portfolio.

"The property is a newly constructed medical office building; ST. Lukes Medical Office Building, in Phoenix, Arizona. The total value of the investment is USD12.13 million," he added.

Mr. Al-Gharaballi pointed out that the average yearly cash on cash income on the acquisition is approximately 5.8%, although the expected cash income for the first year is 5.2%, distributed monthly.

He stressed that Global relentlessly investigates and analyze all acquisition opportunities throughout the United States, which has lead to the conclusion of this deal.

The property is located on conjunction of 18th street and Villa Street on the campus of the St. Luke's Medical Centre and is directly adjacent to the 225-bed hospital. The Van Buren Street has experienced modest growth in recent years, including a 100,000 sqf biomedical facility currently under development.

Furthermore, the hospital currently has another on-campus medical office building that with 100% occupancy.

The property consists of a three-story concrete building which contains 51,480 rentable square feet. It is designed with a shaded patient drop-off area that provides sheltered access to the building. Surface parking has been built as part of the development and accommodates approximately 250 cars.

Additionally, the property was recently developed and is currently in the leasing period. At present, the property is 22.2% leased (11,417 sf) to three medical tenants, another 12,200 square feet of rentable area is considered to be close to lease execution to an additional three tenants.

Mr. AlGharaballi stated that in order to minimize the lease-up risk, the fund has negotiated a master lease with the seller for the initial two years of the fund holding period and he will be responsible for property management charging the fund a management fee of 4.0% of effective gross income.

It is worth mentioning that the fund has acquired its first two office buildings in Chicago and North Virginia for a total value of USD 72 million with a total commitment from the fund of USD 16.5 million. The second investment was the acquisition of a Medical Office Building in Illinois for a total cost of 10.28 where the fund contributed USD 3.48 million.

Additionally, in the beginning of this year, the fund has concluded its second Medical Office Building transaction in Georgia with a total value of 21.1 and the fund share is USD 7.4 million.