Seeking to obtain more workplace residential or commercial properties in its core markets without turning to releasing stock or raising take advantage of, Columbia Residential or commercial property Trust (NYSE: CXP) has actually formed a joint endeavor with Allianz Real Estate to pursue Class-A workplace acquisitions in certain U.S. markets. The two investors have initially contributed three of their particular residential or commercial properties to the joint endeavor with a combined gross possession worth of $1.26 billion.
Columbia contributed a pair of its homes in the San Francisco Bay area: University Circle, a three-building, 451,000-square-foot office complex in Palo Alto valued at $540 million, which Columbia acquired in 2005; and 333 Market St., a 657,000-square-foot workplace tower in the San Francisco monetary district valued at $500 million, which Columbia got in 2012.
Allianz now owns a 22.5% interest in University Circle and 333 Market, while Columbia owns 77.5% and will continue to manage property management and leasing at the 2 residential or commercial properties, along with management of daily operations of the joint endeavor.
Over the next 12 months, Allianz plans to increase its ownership interest in both residential or commercial properties, changing Columbia’s ownership portion to 55% and self-funding the endeavor for Columbia.
Allianz contributed 114 5th Ave., a 352,000-square-foot office building in Manhattan valued at $220 million that Allianz has actually owned since 2015 along with its partner, L&L Holding Co. Columbia and Allianz now each own 49.5%, while L&L keeps its general partnership stake and will continue as the home management and leasing agent for this Midtown South building.
Through the joint endeavor, Allianz and Columbia Residential or commercial property Trust mean to pursue extra core workplace assets in CBD areas. Based in New york city City, Allianz Real Estate deals with the portfolio financial investment strategies in the Americas on behalf of a variety of Allianz Group insurance companies.
“Our financial investment in this joint venture accomplished our immediate goal of acquiring leading office assets in core areas on the West Coast,” stated Christoph Donner, CEO of Allianz Realty. “Over the long-term, the chance to even more diversify and broaden our nationwide geographic exposure in the U.S. office sector, and to form a tactical partnership with Columbia Property Trust is a great deal.”
Nelson Mills, president and CEO of Columbia Property Trust, said the joint endeavor with Allianz will enable the REIT to increase scale in its core markets while avoiding dilutive investment alternatives.
“This partnership permits us to increase market existence without providing stock or raising leverage,” kept in mind Mills. “In addition, with these transactions, we recognize a part of the significant worth we have produced within our portfolio.”
Columbia was recommended by HFF and J.P. Morgan Securities LLC on the deals. Allianz was encouraged by Cushman & & Wakefield of New york city, NY on 114 Fifth Opportunity.
For additional details on the property transfers, see CoStar Sale Comps 3946063 and 3946070.