IRS Re-Ups on 532 KSF of Fresno Office Space

January 31, 2012
By Nicholas Ziegler, News Editor

The Internal Revenue Service, acting through Government Properties Income Trust, just signed a 10-year, 531,976-square-foot lease renewal at 5045 E. Butler Ave. in Fresno, Calif. Marcy Owens Test and William Hill of Jones Lang LaSalle Inc.’s Government Investor Services group represented the building owner, Government Properties Income Trust, while the GSA was self-represented.

“The owners, Government Properties Income Trust, have a long-standing relationship with the IRS and are pleased it will continue into the future,” Test, who is a senior vice president with JLL, said. “This lease is meaningful for the City of Fresno as the government is committing to another ten years and we appreciate their efforts in completing this lease renewal prior to its expiration.”

Additionally, Government Income Properties Trust closed a five-year, $350 million unsecured term loan on the same day as the closing of the Fresno deal. The loan matures on Jan. 17, 2017, and was signed at LIBOR plus 175 basis points. At the time of the deal, the agency said it would use the proceeds to repay part of its outstanding debts from an existing $550 million credit facility as well as to possibly fund future acquisitions.

A report by the Building Managers and Owners Association that was released earlier this month found Fresno to be the most inexpensive office market in the country – out of the 278 markets surveyed – on the basis of total fixed and operating expenses. Total operating expenses include all expenses incurred to operate office buildings, including utilities, repairs/maintenance, cleaning, administrative, security and roads and grounds. Fixed expenses include real estate taxes, property taxes and insurance. In Fresno, the average was $4.25 per square foot, defeating second-place finisher Jackson, Miss., which came in at $4.97.