Investcorp’s Buying Binge Continues

Paces West Office Complex

By Barbra Murray, Contributing Editor

Never shy about plunking down the big bucks, the U.S real estate division of Bahrain-based investment manager Investcorp has added a national portfolio of 5.5 million square feet of office and industrial properties to its holdings through four transactions totaling approximately $400 million.

Investcorp partnered with several operating partners on the purchases, which consist of Class A and B properties located in metropolitan Atlanta, San Francisco and Boston.

In Atlanta, Investcorp joined forces with Ackerman & Co. on the acquisition of the portfolio’s industrial segment, the 4.1 million-square-foot, 69-building Stone Mountain Industrial Park, from Pattillo Industrial Real Estate. Also in Atlanta, Investcorp snapped up Paces West, a two-building office complex offering 646,000 square feet of Class A accommodations. Oaktree Capital Management and TIER REIT Inc. were the sellers.

In the Boston area, Investcorp grabbed Ballardvale Office Park, a 550,000-square-foot corporate campus in Wilmington, taking it off the hands of AEW Capital Management and Griffith Properties. And rounding out the group of purchases is the 200,000-square-foot Tower Plaza office complex in San Mateo, just outside of San Francisco. Investcorp acquired the five-building asset from a joint venture consisting of Scanlan Kemper Bard Cos. and Goldman Sachs, which had bought the complex in January 2014.

The multi-transaction acquisition of office and industrial properties dovetails with Investcorp’s strategy of investing in value-add assets with solid cash flows in leading U.S. markets featuring strong economic fundamentals and employment growth. And the portfolio’s average vacancy rate of 85 percent provides an upside opportunity on which Investcorp will capitalize through upgrades and capital investment.

Investcorp has been quite acquisitive over the last 12 months, having shelled out more than $1.1 billion on property purchases totaling millions of square feet and thousands of multifamily units. Most recently the company announced it had acquired a 3,400-unit group of eight residential properties located in five top metro areas in multiple transactions totaling $400 million. And the year is not over just yet.