HSBC Bank provided $110m in first mortgage loans to New York-based Westbrook Capital for the acquisition of a majority stake in two Washington, DC, office properties.
The bank provided $83m for 1325 G Street NW and $27m for the Colorado Building at 1341 G Street NW, located two blocks away from the White House in the heart of downtown. The loans carry a loan-to-value of 55 percent.
New York-based Westbrook Partners paid $200m for a 90 percent stake in the properties from Dallas-based TIER Real Estate Investment Trust (REIT), formerly known as Behringer Harvard REIT, earlier this month. The firm paid $152m for 1325 G Street and the $48m for the Colorado Building. TIER has retained 10 percent ownership in the portfolio.
Behringer Harvard REIT reportedly acquired the Colorado Building in August 2004 for around $44m and bought 1325 building in October 2005 for $135.5m.
The 125,000 sq ft Colorado building, built in 1903, houses the GSA’s Federal Bureau of Investigation and Merill Communications offices. The occupancy lease for FBI ends next year in February, according to property records.
The TIER REIT rebranding (from Behringer Harvard REIT) involved cutting leverage on its portfolio from 70 percent to about 40 percent. The company also pulled out of almost 17 markets during the last three years to consolidate the business.
TIER will pursue about $200m worth of new investment opportunities in the next year and half and is looking to list on the New York Stock exchange in the third quarter this year.
Westbrook Partners, founded in April 1994, has raised and invested about $10 billion worth of equity across US, Asia and Europe, according to the company website.