A subsidiary of the National Life Insurance Company has provided a $32.4 million acquisition loan to Preferred Apartment Communities (PAC) on a nine-story, 169,500 sq ft office building in Birmingham, Alabama. The 15-year loan has a fixed interest rate of 3.52 percent.
The Class A office building is located at 569 Brookwood Village in a mixed-use shopping district in the Mountain Brook area. The property is 100 percent leased to tenants including PricewaterhouseCoopers, Merrill Lynch and Kinder Morgan, on an average lease term of nine years.
Daniel DuPree, CIO at PAC, said in a statement that this acquisition aligns with the company’s strategy of holding a portion of its assets in properties outside its core of multifamily communities.
The vacancy rate in the Birmingham office real estate market slightly increased last quarter to 14.4 percent, up from 13.8 percent at the end of the first quarter, according to a recent Cushman & Wakefield report. But the city’s office leasing activity may stabilize the second half of this year.
“With no new speculative construction on the horizon, competition for quality office space should increase, which will improve vacancy levels across the market and put upward pressure on overall asking rates,” reads the report.
National Life Insurance Company’s parent corporation had $31.1 billion in assets under management by the end of last year, with 12 percent, or $3.7 billion, in commercial real estate loans, according to its 2015 annual report.