Banyan, Oaktree JV Buys Office Portfolio from Parkway Properties
- Dec 18, 2014
By Gail Kalinoski, Contributing Editor
A joint venture between affiliates of Banyan Street Capital and Oaktree Capital Management bought 19 Class A office assets in six states for $237 million from Parkway Properties, which retained three Tampa, Fla., buildings after flipping most of a $475 million acquisition.
Parkway Properties, an Orlando, Fla.-based office REIT, said in September it only wanted Corporate Center I, II and III at International Plaza in the Westshore submarket of Tampa. But the properties, which total about 980,000 square feet, were owned by an unidentified high-net worth seller who required they be sold as part of a 22-building, 3.1 million-square-foot portfolio. James Heistand, president & CEO of Parkway Properties, said the remaining 19 assets, while all of high quality, did not fit with the REIT’s investment strategy of focusing on Class A properties in the central business districts of higher growth submarkets. Parkway Properties was attracted to Corporate I, II and III at International Plaza because it already owned four assets in Westshore, including Corporate Center IV.
“The completion of the Corporate Center acquisition reinforces our track record of creative deal structuring and further enhances our scale within Westshore, the top-performing submarket in Tampa,” Heistand said in a news release. “These three assets represent approximately 1 million square feet of high-quality, value-add office product located in a core submarket where our existing portfolio is currently approximately 96 percent leased.”
Current occupancy at the three buildings is 71 percent, he said.
The REIT said the Corporate Center assets were funded through a combination of proceeds received from a September public offering of common stock and borrowings under the company’s unsecured credit facility.
Parkway now owns or has interests in 52 office properties in eight states with about 18.5 million square feet of leasable space.
HFF marketed the 22-property portfolio on behalf of the owners, who were advised by Interventure Advisors, L.P. The original portfolio was comprised of six properties in Tampa, including the three in Corporate Center; three in Orlando; six in Atlanta; three in Houston; two in Morrisville, N.C.; and one each in Louisville, Ky., and Richmond, Va., according to a release from HFF.
The HFF investment sales team representing the sellers included senior managing directors Hermen Rodriguez and H. Dan Miller; managing director Ralph Smalley; directors Martin Hogan and Ike Ojala and associate director Jorge Portela.
HFF also secured acquisition financing for Banyan, a Miami-based private equity firm focused on acquiring and managing office properties directly or in joint ventures with institutional capital partners, and Oaktree, a Los Angeles-headquartered global investment manager that specializes in alternative investments. A $210.7 million floating-rate loan was placed with Blackstone Mortgage Trust to fund the acquisition as well as certain capital expenditures and leasing costs.
Financing was arranged by the HFF debt placement team led by senior managing directors Wally Reid and Paul Stasaitis.
Banyan Street and Oaktree have worked together on other deals, including the acquisition earlier this year of Douglas Entrance Office Park in Coral Gables, Fla., for $100.7 million. In the fall, Oaktree provided a mezzanine loan to Banyan Street and a foreign equity partner as part of a $182 million financing deal for Peachtree Center, a 2.5 million-square-foot office and retail complex in downtown Atlanta.