Investcorp acquires three major real estate assets in the US

Investcorp has just closed on its purchase of the seven-story Park Tower office complex in Long Beach, California for an undisclosed price. The deal gives Investcorp a Class A office tower in a major coastal metropolitan area. Park Tower closely follows Investcorp's $37m acquisition of the Bethesda Health City building in Boynton Beach, Florida and of the Ashford, a 221 unit garden and townhouse community composed of 15 residential buildings located in Atlanta, Georgia.

The three properties, acquired according to Shariah compliant structures have strong "going in" cash yields and enjoy high quality existing tenancy underpinned by the business and residential communities in Greater Los Angeles, the corridor between West Palm Beach and Ft. Lauderdale, and in the prestigious Central Perimeter area of Atlanta.

Khalid Al Rumaihi, Managing Director at Investcorp and regional head for United Arab Emirates, said, "Despite the difficult economic conditions, Investcorp continues to secure investments with potential outperforming returns driven by its focus on strong fundamentals and concrete knowledge of the US real estate market. These three Shariah compliant US properties form a great addition to the mix of investments in our real estate portfolio given their solid and stable tenancy record and excellent locations within urban communities."

With these three acquisitions, Investcorp's real estate team has invested approximately $300m in eight new real estate deals this year, adding to its portfolio of retail, office, residential hospitality and medical facilities. While many of the properties enjoy close proximity to large commercial and economic hubs, they lie in often overlooked real estate markets where it is easier to secure private deals at attractive valuations. Examples of Investcorp's strategy include the May 2011 acquisition of Residence Inn Manhattan Beach just outside of Los Angeles, and Princeton Forrestal Village, an office and retail complex in Princeton, New Jersey acquired in January 2011.

The 133,000 square-foot Bethesda Health City building, acquired in a partial leaseback transaction from Bethesda Health Systems (BHS), is situated on a 40-acre campus and is currently 98% leased. The building has a track record of high occupancy and strong tenant retention that has consistently exceeded 90% since its 1996 opening.

The Long Beach, California Park Tower office building is a 120,000 square-foot facility serving the communities of Los Angeles to the north and Orange County to the south. It is currently 96% occupied.

The Ashford remained stable during the recession and recently has begun to show signs of rental rate growth with a current occupancy of 97%.