Recent deals for three low-rise offices in Southern California capped off an active couple of months for Newport beach-based Buchanan Street Partners, which has also added a 10-story office in Dallas to its portfolio of recent investments.
The real estate investment management firm, which invests in debt and equity capital on behalf of institutional and private investors, said the purchases, made since December, total more than $100 million.
The largest of the deals was Buchanan Street’s buy of Granite Tower, a 10-story office in Dallas that runs about 240,000 square feet.
The building is said to have traded hands for about $38.5 million, or $160 per square foot.
Buchanan Street bought the building, which is about 97% leased, on behalf of an unnamed pension fund.
The purchase was made with an eye on cash flow and expectation of rising valuations in the immediate area, thanks to a heavy amount of local infrastructure improvements.
Granite Tower is in the LBJ Freeway corridor of Dallas, an area that had more net office leasing than any other business district in the city last year, according to local reports.
The Dallas purchase adds to a string of investments in the past few years in Texas, one of Buchanan Street’s core markets for deal-making. Other investments in the state since 2012 have included apartment complexes in Austin and an office complex near Houston.
San Diego County
Buchanan Street stuck closer to home on a pair of recent transactions in San Diego County worth a combined $42.6 million.
It bought the Cornerstone Heights Corporate Center, a two-building complex about a mile east of the 805 Freeway in the Sorrento Mesa area. The complex, which totals 97,945 square feet, was purchased from Lincoln Property Co. and Artemis Real Estate Partners.
The all-cash deal, which closed last month, sold for $23.1 million, or about $236 per square foot.
Buchanan Street paid another $19.5 million for a two-story, 120,000-square-foot complex called Carlsbad Airport Corporate Center. The building is fully leased and was purchased from Pacific Realty Advisors, which paid a reported $16.8 million for the property in 2012.
The company also recently completed the purchase of a two-building office complex in Pomona that’s about 100,360 square feet.
Terms of that deal were not disclosed. Buchanan bought the property, called University Tech Center, from Invesco.
The company likes the fundamentals of OC’s real estate market, but “there’s too much capital here,” and it has largely stayed away from investments in its own backyard, according to Chief Executive Robert Brunswick.
Buchanan Street’s largest local investment in the past few years was for the WorkScapes office park in Newport Beach. The creative-office campus, which was acquired last year for $14.5 million, is on Irvine Avenue next to the Newport Beach Golf Course.
Buchanan Street remains an active lender for other investors and developers through a variety of mezzanine, bridge and high-yield programs.
It recently funded $34.5 million in structured financing for a pair of office purchases in Tempe, Ariz. It also closed a $10.2 million loan for property that is slated to get a 100,000-square-foot mixed-used development in Culver City on the edge of the westside of Los Angeles.
The new slate of investments comes roughly a year after Buchanan Street restructured its own ownership.
Buchanan Street sold a majority interest of its business to Los Angeles-based investment manager TCW Group Inc. in 2007, just prior to the last downturn.
TCW, which has some $130 billion in assets, was itself acquired by Washington, D.C.-based Carlyle Group in early 2013 on undisclosed terms.
Brunswick and company cofounder and President Tim Ballard last year announced that they had restructured its relationship with TCW and regained a majority interest in Buchanan Street.
Terms of that deal were not disclosed, but TCW remains a minority partner of the company, Brunswick said.
The real estate company expects its pace of deal activity to remain strong for the remainder of 2015, with several hundred million dollars of purchases a possibility, Brunswick said.
