CBRE Realty Trust-Duke JV Closes on 3 MSF Portfolio

The majority of assets in the entire 20-building group are located in the Midwest, a region that accounts for 72 percent of its total square footage.

April 12, 2011
By Barbra Murray, Contributing Editor

Courtesy Flickr Creative Commons user hickr

Joint venture partners CB Richard Ellis Realty Trust and Duke Realty Corp. have wrapped up a 20-property office program with the closing of the second tranche of the endeavor. Phase two of the $516.7 million program involved Duke’s contribution of a 13-building, 2 million square-foot national office portfolio valued at approximately $342.7 million.

The majority of the assets in the entire 20-building portfolio, which encompasses 3.1 million square feet and features an average occupancy level of approximately 95 percent, are located in the Midwest and account for 72 percent of the portfolio’s total square footage, while the Southeast and Southwest account for a respective 17 and 11 percent.

The properties in the second tranche of the transaction include three buildings in Columbus, One & Two Easton Oval and Atrium I totaling 568,800 square feet and two Minneapolis buildings, Norman Pointe I & II totaling 537,000 square feet. Another two structures, The Landings I & II with a total of 350,800 square feet, are located in Cincinnati and two more, One Conway Park and West Lake at Conway accounting for an aggregate 204,500 square feet, are in Chicago. Ft. Lauderdale is home to the remaining four properties–Weston Pointe I through IV–which account for a total 388,100 square feet.

For Duke’s part, the 20-property joint venture program allowed the company to take another big step towards achieving its goal of transforming the composition of its portfolio from mostly suburban office properties to predominantly industrial assets.

As for CB Richard Ellis Realty Trust, the transaction provided the company with the opportunity to further balance out its holdings. “What we liked about the portfolio is its attractiveness on a pricing basis and the accretive returns to our overall portfolio,” Philip L. Kianka, CB Richard Ellis Realty Trust’s executive vice president and chief operating officer, told CPE. “We will continue to look for other properties that will give us a better balance; investments that offer the best return to our shareholders.” Just yesterday, the company closed another attractive deal involving two office buildings in the metropolitan New York City market.

And the company will definitively do business with Duke again in the future. “We’re still working with them on the original program, which was to identify perspective build-to-suit opportunities in the warehouse distribution and logistics property sector.”