Principal Life Insurance Company has provided a $78 million acquisition loan on the four-building Cottonwood Corporate Center office complex in Salt Lake City, Utah.
The seven year loan with a fixed 2.98 percent interest rate went to Hines Global REIT II, which purchased the property for $140 million, an SEC filing shows. Cottonwood Corporate Center consists of 490,030 square feet of net rentable space that is 91 percent leased. Current tenants at the 2755-2855 East Cottonwood Parkway property include SanDisk, Extra Space Storage and 23 additional firms. The complex was constructed between 1997 and 2000.
Before the Cottonwood purchase, the borrower had acquired a total of three properties worth an aggregate of $186.7 million as of March 31, 2016. The private real estate firm Hines Securities launched the trust in 2014. Principal Financial Group, the lender’s parent company, had $547.7 billion in assets under management at the end of the first quarter this year.
New inventory in the Salt Lake City office market will likely drive a temporary uptick in vacancy this year, even as the market continues to grow, according to Cushman & Wakefield report. The agency expects 1.3 million square feet of new office supply to be delivered in the city this year, while that yearly average historically has only been 636,000 square feet.
Both firms were not immediately available to comment.