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Fortress JV buys US restaurant portfolio

Zurich Alternative Asset Management sold the 63-property portfolio, which includes one office.

Fortress Investment Group and a partner have purchased a US portfolio for $127 million, according to a Wednesday announcement.

The New York-based alternative investment firm teamed up with Sansome Pacific, a private San Francisco-based real estate firm, to buy the portfolio from Zurich Alternative Asset Management, the investment arm of Zurich Insurance. Terms of the deal were not disclosed, and the firms could not be reached for comment.

It was unclear at press time through which investment vehicle Fortress made the acquisition.

CBRE Capital Markets brokered the deal, which included 62 fast-casual restaurants across 15 states and one office in Dallas, Texas.

“The portfolio was encumbered by a legacy master lease on well-located restaurant properties, largely tenanted by Chili’s, On the Border and Macaroni Grill,” Guy Ponticiello, a managing director at CBRE, said in Wednesday’s statement. “The short-term remaining lease term to an investment grade rated tenant provided an investor with near-term security of cash flow and an ability to capture future value through the restructuring and repositioning of the existing leases.”

Fortress and Sansome have worked together on previous deals, including the April 2014 sale of three Pennington, New Jersey office buildings for $28.6 million that the duo owned through a quadruple joint venture, according to local media reports.

Last month, SoftBank Group, the Japanese multinational telecommunications and internet corporation, entered into a definitive merger agreement to acquire the firm for $3.3 billion. The transaction is subject to approval by Fortress shareholders, certain regulatory approvals and other customary closing conditions, and is expected to close in the second half of 2017.

Fortress managed $69.6 billion in assets as of December 31, according to its fourth-quarter earnings report.