Broadreach buys California offices

The Palo-Alto based firm has paid $219m for a portfolio that includes a million square feet of commercial space concentrated around Los Angeles and San Diego.

Broadreach Capital Partners has paid $219 million (€171 million) for a portfolio of office and R&D space in Southern California from San Diego-based real estate firm The Shidler Group, which was partnered with Angelo, Gordon & Co.

Shidler acquired the properties in late 2004 for $138.5 million and has since poured $6 million into improvements. The buildings are 82 percent occupied by 165 tenants in the technology, financial services, and medical industries, as well as the government, according to a statement released by Shidler.

“With the continuous flow of capital into the commercial real estate sector, we felt the timing to be opportune to sell into a very strong investment market and to prune our portfolio of select assets as part of our capital recycling program,” said Shidler Group partner Matt Root.

Ten of the buildings are concentrated around Los Angeles, while the remaining projects are located in San Diego.

Broadreach recently closed its BRCP Realty II fund with final commitments of $700 million, more than double the size of its first fund, which it closed in 2003 on $314 million. As of May, BRCP I had made 27 investments valued at nearly $1 billion.

Broadreach has actively invested in commercial space, mixed-use developments and land throughout the Western United States. However, the fund’s attention is also turning to hospitality. A team of executives from St. Louis hotel investment firm Maritz Wolff recently joined the Broadreach team.