Antarctica eyes US government for real estate deals

After closing the $2.3bn acquisition of 11 California state offices in a joint venture with Hines, the Irvine, California-based firm is looking for more public-private opportunities.

Antarctica Capital Real Estate is targeting US states and municipalities looking to sell their real estate assets in a bid to bolster budget deficits.

Last month, the Irvine, California-based firm closed on the purchase of 11 office buildings from the state of California for $2.3 billion in a venture with Hines. The deal, which attracted more than 300 bids, was Antarctica’s largest foray into US real estate.

Speaking in the November issue of PERE magazine, Antarctica managing director Chandra Patel said the firm launched its US real estate arm specifically to close the golden state JV – known as California First – with Hines. As part of its real estate debut, Antarctica also joined forces with a number of veteran property investors, including Spyglass Realty Partners’ Rich Mayo.

Patel said the firm  was now eyeing other US states and muncipalities looking to sell real estate assets in sale-leaseback and public-private partnership-style deals.

“You are talking about generic buildings to the states and muncipalities, but for us these assets are trophy assets,” Patel said.

The California deal, dubbed the golden state portfolio by broker Richard Ellis, was structured as a 20-year sale-leaseback, with six five-year options to renew and 10 percent rent step-ups each five years. The deal also allows the state of California to buy back the assets at any time. The going-in cap rate is 6.4 percent, according to California’s Department of General Services.

To read more about the deal and Antarctica see the November issue of PERE, out now, or click here for subscription details.