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Transwestern, Mirae JV buys offices for $825m – Exclusive

The partners are buying four buildings outside of Dallas in a sale and leaseback to State Farm Insurance.

South Korean investment manager Mirae Asset Global Investments is making its first foray into southern US real estate through the $825 million purchase of four office buildings within a State Farm Insurance campus, PERE has learned.

The suburban Dallas acquisition, in its first partnership with Houston-based real estate firm Transwestern, marks the Southwest region’s largest transaction since 2013, according to real estate data provider Real Capital Analytics (RCA), which provided the deal's price. The four buildings are part of CityLine, a planned State Farm development that will ultimately include retail, restaurants and entertainment facilities, luxury apartments, a 150-room hotel and a 3.5 acre park.

Rachael Risinger, a spokeswoman for State Farm, confirmed that the transaction is pending. The sale “is part of our overall flexible real estate investment strategy,” she told PERE. The Bloomington, Illinois-based insurance company has been selling and leasing back its properties since 2013, including the sale of at least 23 office buildings to Lone Star Funds, according to earlier media reports. A spokeswoman for Transwestern declined to comment, and Mirae could not be reached for comment.

Mirae and Transwestern are buying four buildings, at 1251 State Street in Richardson, Texas, totaling 2.2 million square feet. Construction for the 12-story buildings, which will ultimately house about 8,000 employees, finished earlier this year, according to local media. Because State Farm’s lease runs through 2037, according to RCA, the properties will likely produce stable income. PERE understands that once the transaction closes, the properties will be held in a real estate investment trust, Corporate Properties Trust I.

Though the investment is its first in the south of the country, Seoul-based Mirae has been investing in the US since April 2013, when the manager bought a 31-story Class A office tower in Chicago’s West Loop submarket for $218 million, PERE previously reported.

Mirae’s most recent publicly available US transaction was the August acquisition of Ivy Crossings, a nine-building office campus in Plainsboro, New Jersey for $305 million, according to RCA. Mirae partnered with three other Korean investors to purchase the property.