8 Dec 2015
Investcorp, a leading provider and manager of alternative investment products, today announced that its U.S.-based real estate arm, through four separate transactions, has acquired a portfolio of office and industrial properties in the metropolitan areas of Atlanta, San Francisco and Boston for approximately $400 million. These acquisitions are consistent with Investcorp’s strategy to invest in well-occupied properties with healthy cash flows located in major U.S. markets displaying strong economic fundamentals and employment growth.
The entire industrial portfolio and one of the three office properties are located in the greater Atlanta area, and should be set to benefit from its highly diversified and growing economy. As the business capital of the Southeast, Atlanta boasts some of the highest job and population growth projections in the country. The remaining properties are located in the high-performing sub-markets of San Francisco and Boston, which benefit from strong technology, biotechnology, and healthcare driven office demand.
“Atlanta, San Francisco, and Boston are top business destinations with some of the most compelling job and rental growth stories of recent years,” said Brian Kelley, Principal, Real Estate Investment at Investcorp. “All of the properties in this portfolio are well-occupied with strong, stable cash flows and diversified tenant bases, and thus are well aligned with our investment strategy of working with local operating partners to add value to properties that already provide an attractive current yield.”
Investcorp partnered with several local and regional operating partners to acquire the properties. The properties acquired total more than 5.5 million square feet with an average occupancy rate of approximately 85 percent. Investcorp plans to add value to the properties through upgrades, renovations and capital investment.
The acquired properties are:
Stone Mountain Portfolio, Atlanta, Georgia: This 69-building industrial portfolio is located in the Stone Mountain sub-market and enjoys excellent transportation access throughout the Atlanta metro area, which is one of the top five distribution markets in the U.S. The properties are occupied by a diverse roster of long-term tenants that range from large international companies which use the park as a Southeast distribution hub to smaller, locally-based operations that require easy access to a variety of Atlanta neighborhoods.
Paces West, Atlanta, Georgia: This class A, multi-tenant, office complex in the Northwest submarket of Atlanta consists of two adjacent mid-rise office towers occupied by a diverse, credit-worthy tenant base with limited near-term rollover. Already one of the most affluent areas in Atlanta, the location surrounding the property is undergoing a major revitalization with over $2 billion of public and private investment in transit, retail, entertainment, and office construction, which should support continued rent growth and strong occupancy levels going forward.
Ballardvale Office Portfolio, Wilmington, Massachusetts: This multi-tenant, class B office park is located in the Route 128/I-93 office market, which is approximately fifteen miles north of Boston, providing easy access for the region’s highly desirable, well-educated workforce. The tenants at Ballardvale, of which more than 50 percent are investment grade and/or publicly traded companies, span a broad range of businesses including manufacturing, printing/publishing, technology, biotechnology and education.
Tower Plaza, San Mateo, California: This class B multi-tenant office complex located in the San Francisco submarket of San Mateo consists of a twelve-story office tower, three two-story plaza buildings, one single story plaza building, and a five-story parking garage. Located between San Francisco and Palo Alto, Tower Plaza is highly accessible to employees commuting from the San Francisco Community Benefits District, Silicon Valley, East Bay and the highly affluent Mid-Peninsula neighborhoods immediately surrounding the property.
In the last twelve months, Investcorp’s total real estate acquisitions have exceeded $1.1 billion. Since 1996, Investcorp has completed close to 350 property investments totaling more than $12.5 billion in value. As of June 30, 2015 Investcorp’s real estate group had approximately $1.4 billion in assets under management, primarily in commercial, office and residential properties within the top 30 largest markets in the U.S.