Bascom, Harbor Plan $500M Capital Execution

Harbor Associates and the Bascom Group have formed another office joint venture to purchase value-add office deals throughout the Western US. The two companies have allocated $500 million in capital to deploy over the next two years, and has already made its first two purchases in Los Angeles and Del Mar. The two transactions totaled $37.5 million. This is not the first venture from the two companies. Over the last three years, the two companies executed $250 million in office transactions. This new strategy shows the companies’ bullishness on the office market and the region. We sat down with Paul Miszkowicz, a principal at Harbor Associates, for an exclusive interview to talk about their strategy.

GlobeSt.com: What was the impetus for this joint venture capital allocation in office?

Paul Miszkowicz: There is continued appetite from the Bascom guys to diversify into other product types and investment deals. They typically do $400 to $600 million a year in multifamily transaction volume, and I think there is a feeling that multifamily rents have gone up considerably for the last few years. Now, the market is at a point where you are buying properties at 4% or 5% cap rates and there is a lot of dialogue about affordability. There is a feeling and a sense that rent growth is potentially not going to happen at the same clip that has happened in previous years. That really drew Bascom to want to start an office venture. In office, it feels like there is still room to grow. We would love to be doing $50 million, $75 million, $100 million transactions, but we have found the most success in the $10 million to $35 million space, buying sub-institutional assets through off-market deals. We continue to find interesting niche situations, and our focus is really on continuing that effort and growing the company.