Investcorp Expands in US with $250M of CRE Purchases

By Barbra Murray, Contributing Editor

Centerpoint I, Denver

Boston and Denver—At the beginning of 2016, Investcorp kicked off a new acquisition initiative focusing on high-quality properties generating cash flow in key U.S. markets, and the Bahrain-headquartered global provider and manager of alternative investment products has been grabbing assets across the country ever since. Acting through its U.S.-based real estate arm, Investcorp recently snapped up 1.8 million square feet of properties in transactions totaling approximately $250 million.

Investcorp’s five new properties, all acquired in joint ventures, are located in the thriving Boston and Denver metropolitan areas. “(They) are highly desirable markets whose strong economies make them appealing locations for investments,” Herb Myers, managing director for real estate investment with Investcorp, said in a prepared statement. Denver and Beantown hold the 11th and 12th spots on PwC and the Urban Land Institute’s list of the top U.S. markets to watch in 2017 for overall real estate prospects.

In Boston, the company picked up a four-building industrial portfolio consisting of 900,000 square feet with a tenant roster that’s 95 percent occupied. And just a stone’s throw away in Cambridge, the leading life sciences hub in the world, the company purchased the 76,000-square-foot Blackstone Science Square, taking the 99 percent leased office/lab property off the hands of Brickman Associates for $56 million, per the Middlesex South Registry of Deeds.

Blackstone Science Square, Cambridge, Mass.

The second half of Investcorp’s group of new acquisitions is located in metropolitan Denver, and includes Centerpoint I & II, an 88 percent leased office complex featuring 374,000 square feet of space in the city’s Midtown submarket. Bought in partnership with Schnitzer West LLC, the buildings was acquired from Unico Properties LLC for $61.7 million. And completing the Rocky Mountain collection are Arapahoe Business Park in Centennial and 345 Inverness in Englewood, which together encompass 10 office/flex facilities totaling 485,000 square feet. Investcorp and Griffin Partners Inc. purchased the industrial buildings, which are 95 percent leased, from Hines REIT for $78.5 million.

The private equity company managed to snag all five assets at prices significantly below replacement costs.

“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 properties have long weighted average lease terms, and we believe there is upside potential through our plan to implement property upgrades and accretive leasing,” Myers added.

In addition to a focus on premier quality, key locales and solid occupancy, Investcorp’s new U.S. investment strategy calls for long-term holds. The company made its inaugural acquisition under the new initiative in February, purchasing the 170,800-square-foot office tower at 733 Tenth St. in Washington, D.C., for roughly $180 million. Investcorp followed that transaction with the $223.5 million September acquisition of 901 Fifth Ave., a half-million-square-foot office building in Seattle.