Los Angeles-based investment firm Karlin Asset Management (KAM) plans to plough up to $1 billion into European real estate deals over the next 24 months.
KAM, which was started by LA surgeon Gary Karlin Michelson who received a $1.4 billion settlement in 2005 over an intellectual property lawsuit, revealed the plan as it announced its maiden deal in the region.
Through real estate subsidiary Karlin Real Estate, it has snapped up a 169,931 square foot office in Peterborough to the north of London in the UK for £16 million (€18.5 million; $24.6 million) from Glanmore Fund Advisors marking its entry to Europe.
As part of its property push in the region, Karlin expects to open an office in London in the near future, although the firm declined to provide further specifics. The firm will target acquisitions across commercial property types, including office, industrial and retail.
“The current European real estate market closely parallels what we saw in the US a few years ago,” said David Cohen, Karlin Asset Management’s chief executive officer. “Valuations are being affected by the lack of financing, particularly in the secondary markets, which is similar to what we experienced in the US. This has created a window of opportunity for us to invest up to $1 billion in select institutional quality assets in the UK and other key European markets at a very compelling basis.”
The first property, Worldwide House, is a four-story, 1970s-built office that was renovated in 1996 and is 100 percent occupied through 2021 by Travelex, the world's largest non-bank foreign exchange business.
The tilt to invest up to $1 billion in Europe would see KAM add to its existing US portfolio of more than 5 million square feet across offices, multifamily, retail and industrial assets as well as 297 acres of land in Austin, Texas that is being developed into a technology and office park. Karlin also has a real estate lending platform that has deployed more than $300 million in debt financing.
Its founder Michelson has been listed as the 258th richest man in the US by Forbes magazine. The surgeon is well known for a protracted legal case against Medtronic which the medical company eventually settled for $1.4 billion.
An article in The New York Times reported Michelson began inventing less invasive surgery because he had unusually large hands. “Some of his spinal surgery patients were scared because large incisions would be needed to accommodate his hands.” it reported. The article continued: “I said this can't be right. There must be a way to do this surgery without the surgeon's hand going in.”