Spear Street Capital Sells Minority Stake

A division of Aberdeen Standard Investments now owns an interest in the San Francisco-based office property owner and operator.
5 Houston Center. Image via Google Street View

Spear Street Capital LLC now has a new ownership partner following the office property owner and operator’s sale of a minority stake to Bonaccord Capital Partners. Bonaccord, a division of global asset manager Aberdeen Standard Investments, acquired a passive, non-voting interest in Spear Street. Neither company has publicly revealed the terms of the transaction.

READ ALSO: Value-Add Investors Should Heed These Trends

Spear Street made its debut in 2001, focusing on the acquisition of office properties primed to benefit from physical improvements and creative leasing activity in primary and secondary markets across the U.S., Canada and Europe. Today, the San Francisco-based company boasts a portfolio of owned and sold assets valued in excess of $8.6 billion.

With Bonaccord’s investment, Spear Street now has the added resources necessary to solidify the long-term stability of its investment platform. Bonaccord brings to the table access to Aberdeen’s global reach and capabilities, which will aid in the bolstering of Spear Street’s strategic initiatives. Spear Street relied on Berkshire Global Advisors for guidance on the transaction, which marks the extension of an existing relationship with Aberdeen.

More than value-add deals

Spear Street typically targets assets and portfolios exceeding $25 million in total value, but a great many of its purchases over the last 12 months have been far above the company’s stated minimum investment requirement—and they’ve involved coveted, high-profile assets. In the third quarter of 2019, the company bought the 370,000-square-foot O Mile-Ex complex, a former Montréal textile factory that had been redeveloped into one of the Canadian city’s leading tech hubs, for $153 million. And in one of the largest Chicago office trades of 2019, Spear Street added the 967,000-square-foot, fully leased trophy high-rise located downtown at 500 W. Monroe St. to its portfolio in a $412 million deal. And the company further expanded its footprint in the Windy City in May 2020 with the $210 million acquisition of the 650,800-square-foot trophy asset at 225 W. Wacker Drive.

Despite a series of big-ticket purchases of premier properties, Spear Street hasn’t abandoned its value-add roots. In May 2020, natural gas firm Venture Global LING Inc. doubled its occupancy at Spear Street’s 5 Houston Center office building at 1401 McKinney St. in Houston, where the company had completed a full-scale renovation in 2019, two years after acquiring the approximately 580,900-square-foot asset in a $272 million portfolio transaction.