Gramercy Property Trust (GPT), TPG Enter Strategic Office Partnership

September 12, 2016 6:46 AM EDT

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Gramercy Property Trust (NYSE: GPT) and TPG Real Estate announced that they have partnered to form Strategic Office Partners, a platform that will aggregate a diverse portfolio of single-tenant office assets in high-growth metropolitan areas in the United States. The platform was seeded by the acquisition of six office assets, valued at $187.5 million, with a weighted average remaining lease term of 3.6 years at closing, weighted by square footage. Together, TPG and Gramercy committed $400 million and secured a $200 million non-recourse credit facility from Morgan Stanley. Strategic Office Partners will seek to acquire up to $1 billion in assets over a three-year period.

The portfolio is comprised of high-quality, single-tenant net lease office assets totaling approximately 1 million square feet in the Los Angeles MSA, San Francisco Bay Area, the San Diego MSA, Nashville and Minneapolis. These office assets, which provide tenants with better than market amenities, including cafeterias, gyms, and flexible parking, are occupied by deeply embedded corporate users. The buildings have an average tenant tenure of over 11 years, and half of the assets have been occupied by the original tenant since construction.

“We see a compelling investment opportunity in the office net lease sector and believe that this portfolio of high-quality assets in strong growth markets is poised to benefit from positive fundamental trends,” said Avi Banyasz, Partner at TPG and Co-Head of TPG Real Estate. “We look forward to working with Gramercy, a best-in-class owner and operator, whose extensive experience in the space will prove valuable as we work together to manage and expand the platform.”

Ben Harris, President of Gramercy Property Trust, commented, “We are excited to partner with TPG Real Estate, which is a best-in-class private equity investor. Gramercy will look to leverage its extensive asset management experience from managing its own portfolio and the portfolios of third party clients to enhance the value of the platform over time.”

For inquiries relating to acquisitions, leasing and sales, contact Peter M. Tubesing, Managing Director at ptubesing@gptreit.com.



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