Ex-Blackstone, Starwood principals buy London office

Crosstree Real Estate Partners, the private equity real estate firm launched by Nick Lyle and Sean Arnold earlier this year, has made early inroads into the prime London market with the purchase of a Mayfair office/hotel property from Aviva for £155 million.

Crosstree Real Estate Partners, the private equity real estate business founded this year by former Blackstone Group principal Nick Lyle and former Starwood Capital Partners principal Sean Arnold, has acquired a large office building in London’s Mayfair.

According to a report by Property Week, the firm has purchased 1-3 Berkeley Street from Aviva Investors’ Life Funds in a deal valued at approximately £155 million. The magazine reported that the transaction was completed within just two weeks after going under offer.

The property comprises 365,976 square feet of offices, a 195-room hotel and five retail units. The sizeable transaction sees the firm, launched at the end of summer with backing from Swiss-Italian pharmaceuticals billionaire Ernesto Bertarelli, place down a serious early marker in the tight prime London real estate market. The firm is understood to have beaten off competition from rival bidders including London-based property company Derwent London, hotels business Peninsula Hotels and Northwood Investors, the private equity real estate firm led by another former Blackstone executive, John Kukral.

According to a report by the Financial Times at the time of Crosstree’s launch, the Bertarelli family is keen to invest up to £500 million initially in the UK as it starts building out a property empire. The firm also is expected to make investments in other sectors and regions in the UK and across various risk-return strategies.

Aviva’s Life Funds comprise approximately £7 billion of assets and include the Aviva Life and Pension UK Limited fund, the Aviva Linked Property Fund and Aviva Annuity Limited.