GIC to buy $1bn US office portfolio

Singapore’s sovereign wealth fund is teaming up with an investor group led by Beacon Capital Partners to acquire three complexes in the Washington, DC area.

GIC is betting on the Washington, DC area office market through two new joint ventures with Beacon Capital Partners, the sovereign wealth fund said Wednesday.

GIC is partnering with Beacon and other investors to purchase 2.1 million square feet of Washington, DC-area office properties with an aggregate value of $1.05 billion. The assets were part of an office portfolio that Beacon acquired from Blackstone in 2007 for about $6.4 billion.

Terms of the transactions were not disclosed, and neither GIC nor Beacon could be reached for comment.

“These acquisitions will strengthen our portfolio of high-quality office assets in the US and enable us to invest in scale in the Washington, DC market, one of the leading gateway cities of the US,” Adam Gallistel, GIC’s Americas head, said in Wednesday’s statement. “We believe in the long-term strength of the DC metro area.”

Through one JV, the parties are buying Lafayette Centre, a set of three Class A office buildings totaling 789,000 square feet, as well as the Pentagon Center in Arlington, Virginia. The latter property is a two-building, 912,000 square foot complex that is fully leased long-term to the US General Services Administration, a government agency. Beacon will continue to manage the offices.

GIC and Beacon also formed a separate JV to acquire Terrell Place, a three-building office center in DC’s central business district. GIC and GE Pension Trust bought the 424,000 square foot property in September 2010 from New York-based investment firm Tishman Speyer for $230 million. It was unclear at press time whether GE Pension Trust retained a stake in the buildings.

“During our ownership and management, we stabilized Lafayette Centre and Pentagon Center through meaningful capital improvements and we achieved high levels of occupancy in one of the major US markets,” Fred Seigel, Beacon’s president, said in Wednesday’s statement. “In the case of Terrell Place, we see significant additional opportunity and are excited to have GIC join us as we create more value.”

Beacon manages over $12 billion in committed capital, according to the statement.

GIC had over $100 billion in assets under management, with 7 percent of its portfolio in real estate as of March 31, according to its most recent investment report.