Global real estate advisor Savills has been retained by Centurion Properties III as the exclusive financial advisor on the refinancing of a leasehold interest in a five-building, 340,000 sq ft portfolio in Richland, Washington.

The portfolio comprises four Class-A office buildings totalling 311,000 sq ft and a 46-unit, 29,000 sq ft short to long-term stay facility on the campus of the US Department of Energy’s Pacific Northwest National Laboratory. Savills will help Centurion refinance a $58 million bridge loan.

The asset, which is fully leased on a triple net basis by government contractor Battelle, generates $6.7 million of Net Operating Income (NOI) per annum.  The portfolio was constructed on Battelle’s land over a 12-year period beginning in 1991.  Battelle has an option to purchase the five buildings for one dollar each at expiration of the ground leases in 2051 - 2060.  The purchase option requires full and continuous occupancy by Battelle through the expiration dates.

Dan Gorczycki, managing director for Savills New York, said: “In today's market, we anticipate considerable lender interest in an asset featuring an investment-grade tenant secured by an absolute triple net leased Class A portfolio.  With Savills keen understanding of capital markets, we expect to deliver highly favourable terms for our client."

The tenant has invested approximately $17.7 million -- or $57 per square foot -- in base-building capital expenditures since 1997, including new roofs, state of the art HVAC equipment, and security upgrades, among other improvements.  The portfolio benefits from its location on a 350-acre, 2.3 million sq ft campus, where Battelle’s R&D budget amounts to approximately $900 million per year.