TMG Partners Closes $220M Separate Account for Bay Area Investment
The capital investment will support $625 million of investment in office, R&D, life science, residential and mixed-use product.
TMG Partners has closed a $220 million separate account to invest in the Bay Area. An unnamed single institutional investor funded the account. It is TMG’s third venture with the investor.
The capital investment will support the acquisition of $625 million of office, R&D, life science, residential and mixed-use product in the Bay Area, which Matt Field, TMG’s President, calls “one the country’s most competitive real estate investment markets.” Field adds that the capital will allow the investor to respond to opportunities quickly and to deliver high-quality assets to the market.
In a previous special account, TMG invested in an office building at 300 Lakeside in Downtown Oakland, which was pre-leased to PG&E to use as its new headquarters; in an adjacent site for 1.3 million square feet of development; and an office property in Santa Clara. The first special account included the acquisition of three Oakland properties and one San Jose property, which TMG leased to Google, Oracle, Arup, Clovis Oncology, and Santa Clara County before selling the properties.
While the Bay Area was among the most severely impacted markets in the country during the last year, the market has recovered quickly. In July, Berkadia Institutional Solutions’ concessions survey found the apartment market in the region had rebounded in only the last 90 days. At the end of March, apartment concessions offered 7.1 weeks of free rent, and by the end of June, concessions decreased to only 3.2 weeks. As businesses and cultural life in the City of San Francisco has reopened and companies have started to call workers back to the office, renters have returned.
Equally, the office market showed signs of life by mid-year. In the second quarter, office leasing activity totaled 1.1 million square feet, more than twice the previous quarter’s leasing activity, according to a market report from Savills. More than half—59%—of the leasing activity was for new locations, and 61.5% of the leases were signed by tech companies.