The State of Kansas Portfolio consists of two single-tenant office buildings that are leased on a long-term basis to the State of Kansas and house significant operations for the Kansas Department for Children and Families, including the department’s headquarters.
The State of Kansas holds an investment grade credit rating of AA- from S&P Global Ratings, providing exceptional tenant credit for 100% of the portfolio. The State of Kansas Department for Children and Families is one of the largest departments of the state government, with a Fiscal Year 2020 budget exceeding $742 million and 2,617 full time employees.
Headquarters / Central Office
The Department for Children and Families Central Office (DCF Central Office) serves as the state headquarters for DCF, operating from an 86,700 rentable square foot, 6-story building located in downtown Topeka, which is the capital city of Kansas. Situated within blocks of the Kansas State Capitol Building, the DCF Central Office benefits from a central location amongst other key government facilities and surrounding businesses. The DCF Central Office provides administration of all DCF services throughout the state. Responsibilities include oversight of six regional offices for DCF and 34 services centers.
The DCF Central Office is leased via an original 25-year period with 19 years currently remaining, with attractive scheduled base rent growth throughout the primary term. The lease features a rare government structure with tenant responsible for all operating expense increases above the base year amount, including costs for operating, maintaining, repairing, and managing the property, and including real estate taxes and insurance.
Kansas City Service Center
The Kansas City Service Center for the Department for Children and Families (Kansas City Service Center) was built-to-suit for the tenant with completion in 2008, designed and constructed according to the specific needs of the agency. The building is comprised of 72,900 rentable square feet, and is leased for an original period of 25 years, including an early election to exercise both of the two 5-year renewal options. There are currently 12.5 years remaining on the lease term. The Kansas City Service Center is situated in the central business district of Kansas City, directly across from the U.S. District Court, Convention Center, and other key government offices.
Essential programs and services provided at the Kansas City Service Center include the TANF Program (Temporary Assistance for Needy Families) offering employment services and support services for low-income families, SNAP Program (Supplemental Nutrition Assistance Program) administered by the USDA and distributed by each state, Child Support Services (CSS) which establishes parentage, orders and enforcement for child and medical support, locates noncustodial parents and property, and modifies support orders, Economic & Employment Services, Prevention and Protection Services, and Rehabilitation Services.