Manulife US Real Estate Investment Trust (MUST) has announced the sale of 400 Capitol Mall, a 29-story office building located in downtown Sacramento. The property will be sold to an entity known as 400 CM Owner, LLC for $117 million. The REIT plans to use the net proceeds from this sale along with cash on hand to repay all of its loans maturing in 2025, totaling $130.7 million.
According to John Casasante, CEO and CIO of Manulife US Real Estate Management Pte. Ltd., this transaction marks a significant step towards their strategic roadmap’s “recovery” phase. Despite challenges in the U.S. office market and limited access to debt financing for transactions, they were able secure an all-cash buyer for Capitol Tower.
The property spans over 501,000 square feet and is classified as Class A space; however it is considered a non-strategic asset for MUST at this time. By divesting from this property, MUST can redirect capital that would have gone towards operating costs into driving leasing activity and improving the quality of their other assets.
Overall,this move allows Manulife US REIT more liquidity and flexibility during these uncertain times while mitigating risks associated with holding onto non-strategic assets.
