AEW Capital Becomes Major Stakeholder at Heritage Plaza

Brookfield Office Properties Inc. announced this week that it had sold a 90% interest in Heritage Plaza, the 5th tallest building in Houston with 1,150,000 square feet of leasable space, to AEW Capital Management. AEW acquired a 41% stake in the building from Brookfield for $118 million, with the remaining 49% coming from an affiliate, according to a GlobalPost article. Brookfield acquired Heritage Plaza in December 2010 in a deal that valued the building at $286 per leasable square foot.

"This transaction aligns with Brookfield's strategy of creating value in an asset through proactive leasing and asset management and then extracting proceeds for use in other endeavors, such as our various development and redevelopment initiatives," said Dennis Friedrich, chief executive officer of Brookfield Office Properties.

"Led by the energy sector, Houston has consistently been one of the fastest growing metro areas in the nation," said Dan Bradley, portfolio manager for the AEW Core Property Trust. "Rapid job growth and expanding business activity have supported very strong demand for office space and we believe this investment capitalizes on these trends."

Heritage Plaza at 1111 Bagby Street is a Class AA office complex that is currently 98.4% leased, up from 84% leased when Brookfield took control of the building. Situated on the western perimeter of downtown Houston, tenant amenities include ample on-site parking and a fitness center.

For more news and information visit Blumberg Capital Partners.

KBR Tower in Houston Sold for $174.6M

Downtown Houston's KBR Tower has a new owner this week as Brookfield Office Properties, along with joint venture partner KBR Inc., sold the office building to Corporate Property Associates 17-Global, a public non-traded REIT affiliate of W. P. Carey Inc. for $174.6 million. Brookfield originally acquired its stake in the tower as part of the Trizec portfolio in 2006. A team led by Richard Rudd and Kent Peters of Allied Advisors represented Brookfield on the building sale, according to a Houston Chronicle article. The company also represented the buyer in negotiating and structuring acquisition financing with UBS Real Estate Securities.

"These dispositions continue our active capital recycling program over the past two years in which we have sold seven mature or non-strategic assets and reinvested proceeds into higher-yielding strategic opportunities," said Dennis Friedrich, chief executive officer of Brookfield Office Properties.

"Houston's Central Business District's major office towers are a very much sought-after investment for all types of investors," said Richard Rudd, president of Allied Advisors. "KBR Tower represents investment maturity. Investors want quality, stability and security of cash flow. The fact that the building is located in Houston is a very good thing right now."

Located at 601 Jefferson Street, KBR Tower boasts over one million square feet of headquarter and office space, with KBR occupying about 900,000 square feet in the tower, along with an adjacent 1,500-space parking garage. At the time of the sale, which closed Nov. 16, the property was 99.8% leased to seven tenants, according to a Houston Business Journal article.

For more news and information visit Blumberg Capital Partners.

Brookfield Acquires 799 9th Street NW in DC for $106M

Brookfield Office Properties announced this week that it had purchased 799 9th Street, NW on the corner of 9th and H Streets in Washington, DC for $106 million from A-799 9th Street Holdings, LLC. The 10-story class A office building previously traded hands in November 2006 when Cushman & Wakefield negotiated the sale from Blue Capital Investments for $127.5 million. Brookfield said it is funding the acquisition through new property-level financing of $71.5 million and the balance from available cash resources.

Built in 2001, 799 9th Street holds 203,000 rentable square feet and is currently 96% occupied with all leases expiring in December 2012 and January 2013. The property has 156 parking spaces and several street-level eateries, including OYA Restaurant. Brookfield has said that it has planned improvements for the property, including a full lobby and building entry renovation, a tenant fitness center with showers and lockers, and a new roof terrace with views of the DC monuments.

"The East End submarket is thriving, with low office vacancy, new amenities coming online, and an overall 24-7 neighborhood feel," said Dennis Friedrich, president and global chief investment officer at Brookfield Office Properties. "Our investments in several of the premier office buildings in this submarket are consistent with our strategy of owning high-quality assets in the best-located areas of our core U.S. markets."

For more news and information visit Blumberg Capital Partners.

Hammerson London Office Portfolio Sold for £518M

Hammerson PLC announced this week that it had sold the majority of its office portfolio totaling 884,000 square feet to Brookfield Office Properties for aggregate cash proceeds of £518 million, or $812 million. Brookfield Office Properties is funding the acquisitions through the assumption of $106 million of debt, additional property-level debt expected to be put in place prior to close and from available cash resources. Earlier this year Hammerson announced a revised strategy to become a specialist retail property company, and the intention to sell its London office assets.

The portfolio includes:

-125 Old Broad Street: 26 floors and 98% leased
- 99 Bishopsgate: 26 floors and 62% leased
- Leadenhall Court: 6 floors and 100% leased
- 1 Puddle Dock: 7 floors and 100% leased
- Principal Place, a development property planned for a 599,000-square-foot office tower

Brookfield will look at other buying opportunities “across all of the central London marketplaces,” Martin Jepson, senior vice president for development and investment, told Bloomberg. "This transaction is a unique opportunity for Brookfield Office Properties to acquire a portfolio of top-quality office assets and a well-located development site in the London market," said Dennis Friedrich, president and global chief investment officer of Brookfield Office Properties. "This acquisition aligns with our strategy of providing front-office accommodations to the world's most prestigious tenants by owning and operating premier properties that are well-located within the most dynamic global markets."

For more news or information visit Blumberg Capital Partners.

Newport Tower Sold for Landmark $377.5M Pricetag

Brookfield Office Properties announced that it had successfully sold the Newport Tower office building in Jersey City, New Jersey for $377.5 million, making it the largest single office asset transaction in New Jersey history. Multi-Employer Property Trust (MEPT) bought the 36-story, 1.1-million-square-foot office building with advisement from Bentall Kennedy; CB Richard Ellis represented Brookfield in the transaction.

"This was the optimal time to monetize this mature asset, having achieved opportunistic returns for us and our fund partners," said Dennis Friedrich, president and global chief investment officer of Brookfield Office Properties. "During our six-year period of ownership and management, we were able to successfully lease-up, stabilize, and incorporate sustainable strategies in the building to significantly increase value."

Brookfield originally acquired the building as part of a $7.6 billion purchase of Trizec in 2006. The building was reportedly 89% leased at the time of sale with major tenants including BNP Paribas and AXA Equitable.

For more news and information visit Blumberg Capital Partners.

Chevron Picks Up Four Allen Center for $340M

Four Allen Center, the former headquarters for Enron in Houston, was purchased by Chevron Corp. for $340 million this week as Brookfield Office Properties unloaded the property from its portfolio. According to the Wall Street Journal, Brookfield bought the property, which sat vacant for three years before Chevron leased the building. for $120 million in 2006 from Towanda Development I Ltd. The building at 1400 Smith Street stands 50 stories tall with 1.3 million square feet of space.

"We have created significant value through the sale of this stabilized asset concurrent with Chevron's sizeable lease extension at our adjacent property," said Dennis Friedrich, president and global chief investment officer of Brookfield. "Chevron represents the type of top-flight corporate tenant we seek to partner with in our global energy-sector markets."

The sale price is a "coup" for Brookfield, said Dan Fasulo, managing director at Real Capital Analytics Inc. in a Bloomberg article. "It's a win-win for both parties," Fasulo said. "For Chevron, obviously they're a cash-rich corporation. They have the money to buy their own property."

For more news and information visit Blumberg Capital Partners.

World Bank Purchases DC Headquarters for $216M

The World Bank has bought the 8-story building at 1225 Connecticut Avenue in Washington, DC for $216 million according to a Bloomberg report. World Bank has leased the property since 2008 and used 100% of the rentable 240,000 square feet as its headquarters. World Bank acquired the office building from Brookfield Properties, which will be retained as the managing agent for the property. The sale represents a price of $900 per square foot, the highest price per square foot ever paid for an office building in D.C. according to the Washington Business Journal.

Brookfield said it sold the building after spending $32 million on updating it after buying it in 2006 as part of Trizec Properties Inc.'s portfolio according to Reuters. The building was among the first redeveloped buildings in the United States to achieve LEED CS (Core & Shell) Platinum certification. "In keeping with our capital recycling strategy, we will be proactive in seeking similar opportunities to create value within the D.C. market," Dennis Friedrich, chief executive officer of Brookfield's U.S. commercial operations, said in the statement.

For more news and information visit Blumberg Capital Partners.