Investcorp buys $400m of US real estate

The Bahrain money manager’s latest deals were part of more than $1.1 billion in real estate acquisitions in the past year.

Investcorp Bank BSC, the first firm to funnel Gulf money into Western real estate, announced Tuesday that it had acquired $400 million of US commercial real estate, less than two months after assembling a similarly-priced portfolio.

From September to December, the alternatives manager bought four properties in separate transactions, the latest of which closed last week, for a total of more than 5.5 million square feet in Atlanta, Boston and California. Investcorp plans to renovate the properties, which have an average occupancy rate of about 85 percent. The firm’s real estate arm managed $1.4 billion in assets as of June 30.

Two of the properties are located in Atlanta, Georgia. Paces West, a property comprised of two mid-rise, Class A office towers, is anchored by Atlanta-based hospital system Piedmont Healthcare. The other Atlanta acquisition is a 69-building industrial complex called Stone Mountain Portfolio.

Outside of Atlanta, Investcorp looked to opposite coasts for acquisitions. The firm put together the Ballardvale office portfolio in Wilmington, Massachusetts, a suburb of Boston, by buying two buildings that total 669,517 square feet from an undisclosed seller and a majority interest in another two buildings for about $57.8 million from AEW Capital Partners, according to Real Capital Analytics. Amenities at the corporate campus include a fitness center and cafeteria.

On the West Coast, Investcorp purchased Tower Plaza, a Class B office complex in San Mateo, California comprising a 12-story office tower, three two-story buildings, one single-story building, and a five-story parking garage. The firm bought the 146,797 square foot complex for $67.5 million from a joint venture between Goldman Sachs and ScanlanKemperBard, according to Real Capital Analytics.

“Atlanta, San Francisco, and Boston are top business destinations with some of the most compelling job and rental growth stories of recent years,” said Brian Kelley, Investcorp’s real estate investment principal, in a statement. “All of the properties in this portfolio are well-occupied with strong, stable cash flows and diversified tenant bases, and thus are well aligned with our investment strategy of working with local operating partners to add value to properties that already provide an attractive current yield.”

The firm previously announced in October that it had amassed another portfolio, also for a total of $400 million, consisting of eight metropolitan properties across the Midwest and South. Those rental properties total more than 3.2 million square feet with about 3,400 units and are located in Las Vegas, Denver, Chicago, Atlanta and Dallas.

Both the latest deals and the October acquisitions fit within Investcorp’s strategy of investing in the top 30 US markets with growth potential. In the last year, the firm’s real estate acquisitions have totaled more than $1.1 billion, it said in a statement.