LONDON—Lionstone Investments, a privately owned, US-based real estate investment company headquartered in Houston, has partnered with London-based Hermes Real Estate to launch a new real estate investment program, capitalized with an initial $250 million of equity commitments.

Lionstone-Hermes Real Estate Venture will invest primarily in office properties in high-growth US markets. The vehicle is being formed with an open-ended structure allowing for longer term holds of high-quality assets.

The venture represents the first partnership between Hermes Real Estate and Lionstone, and Hermes Real Estate's only vehicle pursuing office properties in internationally competitive US cities. This also represents a continuation of Lionstone's strategy to invest in well-located office properties in highly targeted markets with unique demand drivers and sound fundamentals. Both parties are excited to pursue what they view as a large-scale opportunity.

“We were thrilled to find a like-minded partner in Hermes Real Estate who places tremendous value on a research-based approach, executing real estate investments based on a firm understanding of market fundamentals and end-user demand,” said Glenn Lowenstein, CIO of Lionstone.

Chris Taylor, chief executive, Hermes Real Estate, added: “We have been actively acquiring US real estate since 2011 as part of our global real estate program and are delighted to have now identified a best in class office investment manager to complement our two existing platforms. Lionstone shares our own occupier-driven approach to understanding the key performance drivers from office investment with a long term focus upon responsible and sustainable investment strategies.”

Hermes is one of the largest real estate investors in the UK with over $10 billion (£6.6B) of assets under management. Lionstone, of Houston, TX, is a privately-owned real estate investment firm that specializes in executing national investment strategies on behalf of institutional investors and high net worth individuals.

Hodes Weill Securities, LLC acted as the exclusive financial advisor and placement agent. Separately, Hermes and the Canada Pension Plan Investment Board said Friday that today that they had formed a new UK regional joint venture. The partnership involves Hermes selling 50% of the development phase of Wellington Place in Leeds to Toronto-based CPPIB.