SAN DIEGO, NEW YORK CITY AND SAN FRANCISCO — Prudential Real Estate Investors (PREI) has acquired three office properties totaling approximately 1.4 million square feet in San Diego, New York City and San Francisco following the close of its $430 million U.S. Property Fund V. Managed on behalf of German investors, the fund has also invested in multifamily properties in Phoenix, Houston and Dallas.
Most recently, PREI agreed to acquire the Rio San Diego Plaza, a six-story, 190,000-square-foot office building in the Mission Valley suburb of San Diego, on behalf of the fund. Jones Lang LaSalle sold the 92 percent leased property for $56 million.
The fund has also purchased 575 Lexington Ave., a 740,000-square-foot property in New York City, and 650 California St., a 461,000-square-foot property in San Francisco. Between the capital raised and 60 percent debt financing, the fund can invest more than $1 billion.
“We are very pleased to have reached this level of equity commitments for continued U.S. investments,” says David Pahl, senior portfolio manager for PREI. “We’re grateful for the tremendous support and confidence our German investors place with us, and we are very optimistic about the investment environment over the next several years in the U.S.”
U.S. Property Fund V will primarily focus on office investments in major markets such as Manhattan, Boston, Los Angeles and Washington, D.C. The fund will complement this core/core-plus strategy with a secondary focus on apartment development in high-growth markets.
Rio San Diego Plaza, located at 8954 Rio San Diego Drive, is a Class A building constructed in 2001. The property offers easy access to Interstate 805, Interstate 8 and Highway 163.
The 35-story 575 Lexington Ave. was originally built in 1958 and renovated in 1990. The 34-story 650 California St., previously known as the Hartford Building, was completed in 1964 and achieved LEED Gold certification in 2011.
PREI, the real estate investment management and advisory business of Atlanta-based Prudential Financial Inc., began investing on behalf of institutional clients in 1970. Today, PREI manages more than $51 billion in assets, and since the company created the first U.S. Property Fund in 1994, the series of funds has acquired more than 80 properties for a total investment of more than $3.7 billion.
— John McCurdy