PS Business Parks (PSB) announces $315 million asset sale and tax gain.

PS Business Parks, Inc. (PSB) announced today that it has agreed to sell its Lusk Business Park property in San Diego for gross proceeds of $315 million.  The Lusk property - which is zoned for up to 1.8 million sf of life science development - is being sold at a 1.6% cap rate. “We are pleased to announce the agreement to sell our Lusk Business Park,” said Mac Chandler, the Company’s President and Chief Executive Officer. “This accretive transaction will allow us to realize significant value for our stockholders.”

PSB noted that the sale will generate a significant tax gain.  Approximately $50.5 million of the sale proceeds is expected to qualify as a Section 1031 exchange for the recently acquired Port America industrial park in Dallas.  The remaining tax gain is expected to be distributed as a special dividend in the range of $4.75/share to $5.25/share based on estimates of 2021 taxable income.  Additional proceeds from the Lusk sale will be used to redeem the company's Series W preferred stock, which has been called for redemption on November 3, 2021.

PS Business Parks specializes in the ownership of 'flex' style office/industrial properties in major urban markets. As of June 30, 2021, the company's portfolio included 97 business parks with 27 million square feet of GLA. PSB has a total market capitalization of approximately $6.1 billion and is a member of the S&P MidCap 400 index.