Tishman buys $130m DC office

After restructuring more than $2.2bn of debt secured against its legacy office properties, the New York-based firm has bought a new asset from a venture between GMAC and PRP

Tishman Speyer has acquired a 305,000-square-foot office property in Washington DC for its latest opportunity fund for an estimated $130 million.

The New York-based firm confirmed in a statement it had bought the 12-storey 1110 Vermont Avenue NW office, but declined to provide financial details. According to data provider Real Capital Analytics, though, the 83 percent leased property was sold for $130 million by a venture between GMAC Institutional Advisors and PRP, formerly known as Perseus Realty Partners.

GMAC and PRP bought a partial interest in the property in 2005 in a deal that valued the building at $83 million. Last May, the JV refinanced the office’s first mortgage with a $103.5 million loan from Union Labor Life.

Jerry and
Rob Speyer

Sources told PERE the deal was acquired through Tishman’s opportunity funds, believed to be the $1.05 billion Tishman Speyer Real Estate Venture VII.

In a statement, Tishman co-chief executive officers Jerry Speyer and Rob Speyer said competition for good office properties in DC was “fierce”, adding it was a “welcome addition to our extensive portfolio of quality assets in the region”.

Tishman has spent much of 2010 working with lenders to restructure the debt on its existing legacy portfolio. In June, the firm agreed to pay down $700 million of equity in the former CarrAmerica Portfolio – a group of 28 Washington DC office buildings – paying down $600 million of debt and providing $100 million of working capital. The pay down was reportedly prompted after Brookfield Properties acquired about half the portfolio’s debt at a discount and launched foreclosure proceedings against Tishman in April. That same month, Tishman and its lenders also agreed the restructuring of roughly $1.4 billion of debt secured against five downtown Chicago office properties.

Speaking to PERE at the time, Rob Speyer said the firm was “aggressively” pursuing new deals, as well as working on restructurings, and had $2 billion under its belt ready for new acquisitions. He said Tishman Speyer had raised more than $2 billion of equity to deal with legacy investments since the start of 2010, with an additional $2 billion of existing capital available for new deals.

“We have been aggressive in looking [at deals] but patient in pulling the trigger,” he told the July issue of PERE magazine.