23 Nov 2016
Investcorp, a global provider and manager of alternative investment products, today announced that its U.S.-based real estate arm has acquired a diverse portfolio of real estate properties in the Boston and Denver metropolitan areas, for a total purchase price of approximately $250 million. The five investments include 20 buildings and 1.8 million square feet of office, industrial, flex and laboratory space, highlighting Investcorp’s strategy to invest in strong, cash-flowing properties throughout key U.S. markets.
The investments benefit from a continually improving employment environment. The purchases of the five investments were well below replacement costs and have an average occupancy rate of 94 percent. They were acquired with different local partners who have established track records in their respective sectors and markets.
“Boston and Denver are highly desirable markets whose strong economies make them appealing locations for investments,” said Mohammed Al-Shroogi, Co-CEO at Investcorp. “The acquisition of these properties is in line with our strategy of acquiring well-occupied cash flowing properties in metropolitan areas with strong growth fundamentals. These investments have long weighted average lease terms, and we believe there is upside potential through our plan to implement property upgrades and accretive leasing.”
Fahad Murad, Managing Director at Investcorp in Bahrain, said, “With a strong base of tenants and supportive local market dynamics, these properties are great additions to our US Real Estate portfolio. It has been a very busy year for Investcorp on the Real Estate front and we expect to continue to invest in US real estate.”
Boston is the 10th largest metropolitan area in the U.S. with an unemployment rate of 3.5 percent, well below the national rate of 5 percent. Boston Metro Industrial, a 900,000 square foot, four building industrial portfolio, is 95 percent occupied. The industrial market in Boston has been fueled by robust demand for real estate due to growth in the e-commerce field.
The second Boston acquisition, Blackstone Science Square, is a 99 percent leased 76,038 square foot office/lab property in Cambridge, Massachusetts, leased primarily to tenants in the life-sciences industry. Located between Harvard and MIT, Cambridge is home to over 300 life science and technology companies, representing the largest concentration of life science firms in the U.S.
Denver, the 21st largest metropolitan area in the U.S., is consistently ranked as one of the fastest growing cities in the country with the population expected to increase to over 3.5 million residents by 2020. In 2015, Forbes rated Denver as one of the best places in the country for businesses and careers. This is highlighted by Denver’s current below-average unemployment rate of 3.2 percent.
Investcorp has acquired several office properties in the Denver area, including Centerpoint I & II, a 370,000 square foot office complex in Denver’s Midtown submarket. The Firm has also acquired Arapahoe Business Park and 345 Inverness, a portfolio of 10 office/flex properties comprised of 485,000 square feet and located in Centennial and Englewood, CO.