American Financial Realty Trust Closes Bank Property Acquisition With Heritage Oaks Bank

JENKINTOWN, Pa., June 28 /PRNewswire-FirstCall/ -- American Financial Realty Trust , a real estate investment trust focused on acquiring and leasing properties occupied by financial institutions, today announced that it has completed the sale-leaseback transaction of four fully occupied bank properties from Heritage Oaks Bank, a leading community bank located on California's central coast. Heritage Oaks Bank, headquartered in Paso Robles, California, is wholly-owned by Heritage Oaks Bancorp . The properties were acquired in a cash transaction for an aggregate purchase price of approximately $12.8 million before acquisition costs. The portfolio assets, consisting of three bank branches and an administrative office building, aggregate approximately 38,300 rentable square feet and are located in the municipalities of Arroyo Grande, Paso Robles and Santa Maria, California.

Heritage Oaks Bank will continue to fully occupy the properties under triple net leases, for an initial term of 15 years. The Company anticipates an average capitalization rate (average revenues over the remaining term of the leases less operating expenses divided by the gross purchase price) of approximately 7.00% before transaction expenses based on the projected cash flows. The net rental income under the lease will be subject to annual increases.

The transaction was facilitated under a relationship between American Financial and Sandler O'Neill Partners, L.P., to deliver sale-leaseback financing opportunities to middle market financial institutions in the United States.

"We are pleased to establish a new customer relationship with Heritage Oaks Bank," commented Glenn Blumenthal, chief operating officer of American Financial Realty. "This transaction demonstrates the value of AFR's flexible acquisition structure that enables banks and other financial institutions to rationalize their real estate holdings while maintaining long term stability." Mr. Blumenthal continued, "I'd like to thank our partners at Sandler O'Neill whose knowledge of financial institutions in California's central coast made a seamless execution of this transaction. I look forward to growing and strengthening our relationship with the Sandler team."

About American Financial Realty Trust

American Financial Realty Trust is a self-administered, self-managed real estate investment trust that acquires properties from, and leases properties to, regulated financial institutions. The Company through its operating partnership and various affiliates owns and manages its assets primarily under long-term triple net and bond net leases with banks. The Company is traded on the New York Stock Exchange under the ticker symbol AFR.