Northstar Commercial Partners, Alto Buy Multi-State Portfolio for $224M

by Nellie Day

DENVER — Northstar Commercial Partners and Alto Real Estate Funds have purchased a 24-property portfolio of industrial, office and retail assets throughout the U.S. for $224 million.

The portfolio consists of 13 industrial properties, eight office assets and three retail properties that total 5.9 million square feet. The properties are situated in 12 states: California, New York, Texas, Pennsylvania, Connecticut, Washington, Virginia, Tennessee, South Carolina, Georgia, Alabama and Arizona.

Notable tenants at these properties include Time Warner Cable, ATSG, U.S. Bechtel Corporation, Dollar Tree and Progressive Corporation.

“This deal is the most significant acquisition in Northstar’s company history, bringing along with it our largest opportunity to date to create a positive impact for businesses and local communities nationwide,” says Brian Watson, Northstar’s founder and CEO. “It is very rare in this economic environment to acquire an off-market deal of this magnitude, diversity and low occupancy rate, in order to drive very attractive opportunistic level returns.”

The portfolio is currently 70 percent occupied. Of the 24 properties included in this transaction, 21 are located in areas with unemployment rates that are higher than the national and state averages.

“Our investors will enjoy a portfolio that benefits from a good mix of geographic and sector diversification,” says Yaniv Melamud, CEO and co-founder of Alto. “We anticipate that we will be able to sell 40 percent of the portfolio within a short period of time and with a significant profit. The remaining assets can be sold after we increase the occupancy rate.”

The deal was financed by a combination of preferred equity, institutional debt and a private placement, combined with private investment capital, which was used to form the joint venture between NorthStar and Alto. Howard Gelt and Jane Hinton of Akerman LLP served as Northstar’s legal advisor in this transaction.

Denver-based Northstar Commercial Partners is a privately held commercial real estate investment company. It acquires and operates commercial real estate properties throughout the U.S. New York-based Alto Real Estate Funds specializes in the acquisition of value-added commercial properties in major U.S. cities.

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