Thompson National, Argus Form Venture; Gee, Snodgrass to Join Thompson

Thompson National Properties L.L.C. will manage nearly all of Argus Realty Investors L.P.’s portfolio under a new venture formed by the two California-based companies. Argus chairman & CEO Dick Gee, along with president Tim Snodgrass, will join the Thompson team. Financial details of the deal were not disclosed. Friedman, Billings & Ramsey and Robert A. Stanger & Co. advised Argus on the deal.In a joint release, officials of both firms said it was the right time to consolidate as they seek new sponsors and introduce new investment opportunities. “We are joining forces to build a platform that will lead the industry,” Tony Thompson, chairman of rapidly growing Thompson National Properties, said in the release. “This transaction is the beginning of an industry consolidation that will provide stronger sponsorship for investors during these uncertain times.” Snodgrass, who is also a founder & president of the non-profit Tenant in Common Association, added, “Given the current state of the real estate market, it’s the perfect time to create a relationship that will provide stability and produce innovative investment programs.” Neil Miller (pictured), COO & general counsel at Thompson National, told CPN the deal is actually two separate ventures, one to manage most of the 29 TIC assets in the Argus portfolio–worth a total of about $1 billion–and another to create new opportunities and investments. Among the TIC properties in the portfolio are the Wachovia Capital Center, a 30-story, Class A office tower, that Argus purchased in Raleigh, N.C., in early 2007 for $154.3 million, according to a Feb. 2, 2007, CPN report. Miller said an apartment complex in Houston is also included along with other properties, including numerous Class A office buildings, in the Argus portfolio. “They have a really high quality portfolio in 14 states,” Miller said. San Clemente, Calif.-based Argus has been one of the most active sponsors of TIC transactions, which have slowed due to the credit crunch and the disappearance of the debt market that had helped drive growth of TICs over the last few years. Miller said the TIC part of Thompson’s business won’t be as big as it used to be. “TICs are a smaller market than they used to be,” he said, noting that the “credit market is impacting all (TIC) transactions on both sides.” He said there is “still credit out there for good deals and good projects, but they are hard to come by,” but he admitted that, “I don’t think anyone could have predicted [the credit crunch] would be this dramatic, including us.” Miller said titles and roles for Gee and Snodgrass are still being worked out, but he stressed the transaction is not a merger and that Argus will remain intact. He added that “most of the Argus team is coming over to be part of the TNP family.” Thompson founded his new Irvine, Calif.-based firm in April, just months after his company, NNN Realty Advisors Inc., had completed a reverse merger with Grubb & Ellis Co. Thompson also created and ran Triple Net Properties L.L.C. Between the two companies, nearly $3 billion of equity was invested in 250 properties nationwide on behalf of 30,000 investors. When Thompson set up the new firm, he told CPN in an April 25 interview that he wanted to run a private firm to be nimble enough to take advantage of the changes in the market. Saying it was an opportunity to “create value out of chaos,” Thompson said then that the market conditions “offer strong opportunities for real estate operators who have cash, experience, discipline and an understanding of markets.” The firm provides value-added investment opportunities and asset management services to high net worth investors in the U.S. and abroad and plans to acquire commercial properties, real estate loans and operating companies. Thompson National has been expanding rapidly in recent months, adding more people, more office space and making deals. As reported, Sept. 25 by CPN, the firm teamed with Morgan Management L.L.C. to form Thompson/Morgan Properties L.L.C., a joint venture that will acquire multi-family properties in Texas and areas east of the Mississippi River. In mid-August, Thompson National purchased a $110 million commercial and industrial portfolio from Storm Properties. About half of the 1.5 million square feet of property is fully constructed, while the remainder is in various stages of construction in locations throughout Southern California, including Los Angeles, Torrance and Valencia, according to an Aug. 15 CPN report. The deal will be completed in phases with a final transfer date in February 2009. Argus has completed more than $1 billion in real estate transactions, including TIC and private exchange programs, on behalf of about 1,500 investors since it was founded in 2001. It currently has more than 8 million square feet of space under management. A year ago, Argus acquired a seven-building portfolio of Class A office buildings in Dallas for $130 million. At that time, CPN said it was Argus’ third purchase in the Dallas area. A month earlier, Argus had acquired Northgate Business Center and Blackhawk Corporate Center, three Class A office buildings in Phoenix for $51.3 million. The portfolio was fully leased with tenants like PetSmart, Cox Communications and All State Insurance Co., according to a Sept. 12, 2007, CPN article.