PS Business Parks Inc. (PSB) has acquired a 5.3 million-sq.-ft. industrial and flex portfolio for $520 million. The portfolio consists of 18 multi-tenant business parks comprised of 2.9 million sq. ft. of light industrial space and 2.4 million sq. ft. of flex space in the Bay Area, with concentrations in Oakland, Hayward, Fremont, Milpitas, San Jose, Santa Clara and Sunnyvale.

The seller was RREEF America REIT II Corp. and its affiliate, Northern California Industrial Portfolio Inc.

The newly acquired portfolio is currently 82.2 percent leased to 216 tenants. With this acquisition, PSB brings its multi-tenant and industrial and flex space portfolio to 7.2 million sq. ft. in 30 business parks in Northern California, which accounts for 26.3 percent of the company’s total portfolio.

PSB assumed a $250 million secured loan in connection with the transaction. The interest-only loan has a fixed interest rate of 5.45 percent and matures in December 2016. PSB also entered into a three-year unsecured term loan for $250 million with Wells Fargo Bank. Interest on the unsecured term loan is based on LIBOR plus 1.20 percent. The balance of the funds for the acquisition came from retained cash and PSB’s credit facility. PSB incurred approximately $2.8 million in third-party costs, which will be reported as additional G&A expense in the fourth quarter.

The transaction is “in many ways similar to PSB’s 2003 acquisition of Miami International Commerce Center,” Joseph D. Russell, Jr., PSB president and CEO, noted in a statement. “We were able to leverage our operational experience to exceed market occupancy. We anticipate having a similar opportunity with this portfolio.”