UrbanAmerica Takes Rubicon Portfolio for $515M

As some investors stay on the sidelines, others continue to see opportunity in softening asset values. UrbanAmerica, a New York City-based investment firm, has agreed to pay Rubicon America Trust $515 million for a 3.1 million-square-foot portfolio of government office buildings. Scheduled to close in September, the 14-building deal would expand 10-year-old UrbanAmerica’s footprint in the government office niche. Retail properties make up about one half of Urban America’s holdings, and a partnership with Fisher Brothers could lead to as much as $1 billion worth of office, retail and mixed-use properties. The biggest chunk of the most recent deal is the $389 million in secured debt that Urban America will assume. Rubicon America, an affiliate of the Australian-based Rubicon Asset Management Ltd., said in a statement this week that the sale will generate $90 million in proceeds that will help reduce its borrowing. Rubicon America announced the sale of the portfolio, dubbed GSA I, three weeks after disclosing an independent valuation of its assets. Conducted by CB Richard Ellis Inc., the analysis released June 30 concluded that Rubicon America’s total real estate portfolio has slipped about $97.5 million in value compared to the $1.3 billion carrying value at the end of 2007–a 7 percent decline. The $515 million price tag for the GSA I portfolio reflects a slight premium above the $508.7 million value reckoned by CB Richard Ellis, but like all of Rubicon America’s holdings, the portfolio’s market value has declined significantly during the economic slowdown. As recently as April 2007, the portfolio’s value was an estimated $559.4 million. Rubicon America acquired the portfolio in June 2005 for $482 million. Rubicon America has not disclosed plans for four remaining portfolios of U.S. assets, which total 18 properties and was valued most recently at approximately $721 million.Blog Comments