New York-based Allianz Real Estate and Columbia Property Trust of Atlanta have formed a joint venture focused on acquiring and managing Class A office properties in select markets across the U.S. As part of the newly created initiative, the two firms have contributed three unencumbered properties with a combined gross asset value of $1.26 billion, located in San Francisco and Manhattan. The partnership plans to pursue additional prime office assets in top-tier locations.
114 Fifth Ave. (Yardi Matrix)
Allianz contributed one of its Manhattan office properties to the joint venture. Valued at $220 million, 114 Fifth Ave. is a 352,000-square-foot office building that the company acquired back in 2015. Located in the bustling Flatiron District in Manhattan’s Midtown South, the 19-story property recently underwent a $45 million renovation effort and is fully leased to high-profile tenants such as MasterCard, First Look Media and Acxiom, according to Yardi Matrix data. The LEED Gold-certified tower includes 23,500 square feet of retail space and is managed by L&L Holding Co., which also holds a 1% stake in the property. As a result of the new venture, Allianz and Columbia each owns 49.5% of the Fifth Avenue property, with L&L Holding retaining its partnership stake. Allianz was advised by Cushman & Wakefield in the negotiations.
“In addition to an alignment of our investment strategies, the combination of our highly-experienced and knowledgeable teams of investment and asset management professionals will support growth in the portfolio of our joint investments over time,” Christoph Donner, CEO at Allianz Real Estate of America, said in a statement.
University Circle – 2000 University Circle (Yardi Matrix)
Columbia Property Trust contributed two prime Bay Area assets to the new joint venture: University Circle, a 451,000-square-foot Palo Alto office complex valued at $540 million, and 333 Market St., a 657,000-square-foot office tower in San Francisco’s Financial District, valued at $500 million. The Palo Alto property was acquired by Columbia in 2005, while 333 Market St. was purchased back in 2012. Columbia now retains a 77.5% stake in the two assets, with Allianz currently holding 22.5%. The New York City-based firm will increase its ownership stake to 45% within the next 12 months, while Columbia will continue to manage leasing and day-to-day operations for the two buildings.
333 Market St. (Yardi Matrix)
“This partnership allows us to increase market presence without issuing stock or raising leverage, and we have found an ideal partner in Allianz, which shares our investment outlook and disciplined, long-term approach to investing,” said Nelson Mills, president & CEO of Columbia Property Trust.
