AUSTIN, TEXAS — A joint venture between Thomas Properties Group (NASDAQ: TPGI) and the California State Teacher’s Retirement System (CalSTRS) has acquired an eight-building office portfolio totaling 3 million square feet for $859 million.
The portfolio includes Frost Bank Tower, 300 W. 6th St., One American Center, San Jacinto Center and One Congress Plaza in downtown Austin and Westech 360, Park Centre and Great Hills Plaza in suburban Austin.
“In keeping with our strategic plan to acquire wholly owned or equally controlled properties that are accretive to our after-tax cash flow, we are pleased with the opportunity to increase our investment in Austin and more particularly, in a group of assets that we consider to be crown jewels,” says James Thomas, CEO and chairman of Thomas Properties Group. “We are very encouraged by the continued strength in the Austin market and the prospects for future growth.”
The seller was TPG-Austin Portfolio Syndication, a venture between Lehman Brothers Holdings, an offshore sovereign wealth fund and a previous joint venture between TPG/CalSTRS. A subsidiary of Thomas Properties Group is the managing member with a 50 percent interest and CalSTRS owns the other 50 percent.
Thomas Properties Group has also entered into an agreement with an affiliate of Madison International Realty whereby its affiliate will acquire a one-third interest in the company’s subsidiary that owns the interest in the portfolio.
“These are dynamic properties in a fast-growing market that continues to demonstrate strong fundamentals,” says Ronald Dickerman, president of Madison International Realty. “The portfolio fits well with Madison’s investment strategy focusing on the acquisition of partial interests in core assets.”
Thomas Properties Group’s stock price closed at $5.79 per share on Sept. 19, up from $2.49 million per share a year earlier.
— Savannah Duncan