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TPG pegged to buy Florida REIT

The Fort Worth, Texas-based private equity firm reportedly has agreed to purchase Flagler, a private REIT based in Florida, from Fortress.

TPG Capital plans to acquire Flagler, a Coral Gables, Florida-based private real estate investment trust, from New York-based private equity firm Fortress Investment Group for $1.2 billion, according to a report by Reuters. TPG and Flagler declined to comment, and Fortress could not be reached at press time.

The acquisition would give TPG ownership of Flagler’s portfolio, which includes more than 12 million square feet of office and industrial properties, as well as 5,000 acres of land, throughout the Sunshine State. In addition to development, Flagler also provides brokerage, property management and asset management services to corporate, private and institutional clients.

The Flagler deal represents a further expansion of TPG’s growing real estate holdings. Last year, the private equity firm acquired the North American businesses of UK homebuilder Taylor Wimpey in partnership with Oaktree Capital Management and the former founder of Intrawest, Joe Houssain, for $955 million. In 2010, TPG acquired a large commercial real estate portfolio from ProLogis for $505 million.

Flagler was founded in 1892 by Henry Flagler, who built the Florida East Coast Railway system while also amassing a vast portfolio of land and developing dozens of resorts along the state’s east coast. In 2007, Fortress acquired Florida East Coast Industries – the holding company for both the railroad and the real estate subsidiaries – and soon divided the businesses into two separate companies.