Gatehouse Bank plc (Gatehouse), a wholesale Shariah compliant investment bank based in the City of London, has completed the acquisition of a state of the art office building in Salt Lake City, Utah.
The deal is expected to return a stable and healthy yield over the investment period. The property is 100% leased to the General Services Administration (GSA) for a fixed term of 20 years. The GSA is the procurement agency for the US Federal government, and provides various government agencies with world-class sustainable facilities.
“International investors are continuing to target quality investments with a strong and stable lease profile and, with government tenants tending to occupy space for a lengthy duration, these properties have become increasingly popular acquisition targets,” Fahed Boodai, Chairman of Gatehouse Bank, said.
“Thanks to a post-recession focus on efficiency and consolidation, tenants are also favouring Class A buildings, which are more energy and space efficient than second- and third-generation Class B and C buildings, and these are now experiencing a demand premium in both urban and suburban markets. The combination of these factors means that this property is an extremely attractive acquisition prospect and a significant addition to our investment portfolio.”
The newly constructed Class-A office building is split over four storeys and includes one single-storey annex building and a three-storey structured parking garage. It has been built specifically to meet the critical security requirements of the tenant, and is located on a 7.48 acre site within the upscale International Center Business Park, adjacent to Salt Lake City Airport and including additional amenities such as restaurants, hotels and a gas station.
Salt Lake City is Utah’s largest metropolitan area, and benefits from a diverse economy, healthy demographics and a low cost of doing business. Government employment in the region is considerable, with the State of Utah, University of Utah, and Salt Lake County ranked among the city’s largest employers.
The second quarter of 2012 was particularly strong for the US office market, and occupancy rates continued to improve through the second half of the year to reach peak levels last seen prior to the 2008-2009 recession. Equally demand for US Government leased assets has increased significantly over the last 12-18 months, with properties leased to the Government with ten years or more of lease term and 100% occupancy trading at tight capitalisation rates. The property has a longer remaining lease term than most of the Government-leased properties that have traded over the last year, yet was acquired at a capitalisation rate competitive with several of those properties.