Lone Star Funds has agreed to acquire the US portfolio of Dutch real estate company Wereldhave for $720 million, as the Dutch property owner seeks to exit its investments in the region. The deal is scheduled to close during the first quarter.
The 17-building portfolio, which was purchased for approximately 5 percent above book value, consists primarily of office assets in Washington DC, Texas and San Diego and apartments in Texas. The properties encompass all of Wereldhave’s US real estate holdings, with the exception of two land sites in Texas and Virginia, which were sold to two buyers during the fourth quarter for a total of $10 million.
The acquisition represented a new US transaction for Lone Star after being particularly active in Germany and the UK last year. For example, the German Finance Ministry announced last month that the distressed property investor had agreed to buy real estate company TLG Immobilien for €1.1 billion on behalf of Lone Star’s second real estate fund. The purchase was one of the largest commercial property transactions in Germany in 2012 and the first privatization in the country since the global financial crisis.
The Lone Star deal follows Wereldhave’s announcement in February 2012 to sell all of its property investments in the US and refocus its strategy on real estate in Western Europe. In a statement at the time, the Hague, Netherlands-based company said it had been active in the US since 1978 but lacked scale in the country. The disposition of the US properties was part of a larger strategy to divest more than €1.1 billion of properties over the next two to three years, according to the statement. Proceeds from the sale will be used to pay down debt, the company noted.