GE Pays $47M for 80% Stake in Crescent Building

The deal marks the third in two years between the Fort Worth-based REIT and GE. In July 2001, GE paid $120 million for 80% interest in Four Westlake Park, a 560,000-sf, class A office property adjacent to Three Westlake Park, and Bank One Tower, a 390,000-sf office tower in downtown Austin. Keira B. Moody, Crescent's vice president of investor relations, tells GlobeSt.com that the first joint venture arrangement with so successful that it "made sense to continue the relationship."

CEO John C. Goff explained in a press release that "Three Westlake Park fits Crescent's joint-venture profile in that we offer our partner what we believe to be stable cash flow from a high-quality asset with minimal near-term rollover. In addition, by continuing to manage and lease the property on a fee basis, we effectively increase our return on equity."

Crescent has put six of its 74 office buildings in the joint venture program. Three Westlake Park and Bank One Tower also have 80/20 ownership ratios. The 5 Houston Center, which is nearing completion in downtown Houston, is owned on an 80/20 split with JPMorgan Fleming. In Austin, 301 Congress is a 50/50 ownership with Aetna and Bank One Center in Dallas, 50/50 with Trizec Properties. Moody says the REIT is interested in entering into a few more partnership buy-ins, but declined to name the buildings or the partners under consideration.

Three and Four Westlake Park, built in 1983 and 1992 respectively, are located in lush green space in the heart of the Energy Corridor. Crescent acquired Three Westlake Park in 1996 and Four Westlake Park in 1998. Occupancies are in the high 90% range, primarily filled by energy tenants such as BP Amoco and Conoco.