10 July 2017
San Francisco
Reporter: Theo Andrew

Columbia Property and Allianz finalise $1.26 billion JV


Allianz Real Estate and Columbia Property Trust have finalised their joint venture targeting class-A properties in gateway markets in the US.

The partnership has been seeded with three unencumbered properties with a gross asset value of $1.26 billion.

Two properties have been provided by Columbia, both located in the San Francisco Bay area. These are the 451,000-square foot University Circle in Palo Alto valued at $540 million, and 333 Market Street, a 657,000-square foot office located in the financial district valued at $500 million.

Allianz has contributed 114 Fifth Avenue, a 352,000-square foot office building in Manhattan valued at $220 million.

The 19-storey office block has recently seen a $45 million refurbishment and is fully-leased to number of tenants.

Under the terms of the joint venture, Allianz will now own 22.5 percent of University Circle and 333 Market street, while interest in 114 Fifth Avenue will be split at 49.5 percent each, with L&L Holding company retaining a 1 percent management stake.

According to Columbia, Allianz’s interest in University Circle and 333 Market Street will increase to 45 percent over the next 12 months.

Nelson Mills, president and CEO of Columbia Property Trust, said: “Our joint venture with Allianz is the right vehicle for increasing scale within our core markets.”

He added: “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.”

Christoph Donner, CEO of Allianz Real Estate of America, said: “This opportunity reflects the goal of our US team to pursue high-quality, long-term investments with partners that share our vision and ability to create value.”

He added: “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.”

HFF and J.P. Morgan Securities advised Columbia on the deal.

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