Franklin Street (FSP) Acquires Denver's Dominion Towers

Franklin Street Properties Corp. (NYSE:FSP) recently declared the acquisition of Dominion Towers in Downtown Denver, CO, for a gross price of around $154 million. This off-market deal fortifies the company’s downtown Denver presence.

Specifically, this buyout adds two interconnected 19 and 28-story Class “A” office towers, encompassing a total of around 613,527 rentable square feet of space, to Franklin’s portfolio. Currently, the property’s largest tenant is EOG Resources, Inc. (NYSE:EOG) that has around 29% of the rentable square footage till Dec 2026.

Franklin expects planned building capital investments (without leasing costs) of around $3 million. Per the company, the purchase price reflects a significant discount to the estimated replacement cost.

Situated in the heart of downtown Denver, this property is likely to drive demand for space from tenants. It is adjacent to the 16th Street Mall and has a walkable distance to the light rail. In fact, the company expects the property to enjoy an average occupancy rate of about 89% during 2017, with multiple tenants as well as staggered lease expirations.

Wakefield, MA-based Franklin Street Properties, which targets investing in institutional-quality office properties in the U.S., currently has a Zacks Rank #3 (Hold). Moreover, shares of Franklin gained 4.8% as against the 5.7% decline of the Zacks-categorized REIT Equity Trust – Other industry over the past six months. Also, over the past 30 days, full-year 2016 estimates for Franklin ascended 1.0% to $1.04.

Investors interested in the REIT industry can consider stocks like DCT Industrial Trust Inc. (NYSE:DCT) , Mack-Cali Realty Corp. (NYSE:CLI) and Seritage Growth Properties (NYSE:SRG) . Each of these stocks has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

DCT Industrial delivered an average positive surprise of 5.18% over the trailing four quarters.

Mack-Cali has long-term expected growth rate of 6.6% against the industry average of 5.8%.

Seritage’s estimates for 2016 inched up 0.9% over the past 30 days to $2.34.

The Best Place to Start Your Stock Search

Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>