Hines, Sumitomo Align for US, Japan Office Buys

One of Houston's favorite sons is teaming with Sumitomo's New York City-based real estate arm in what is intended to be a long-lasting marriage. Informal discussions began about a year ago, James Hime, Hines' senior vice president, tells GlobeSt.com. Details about ownership participation are being kept under wraps.

The up-and-coming purchases are 499 Park Ave., a 28-story, 297,713-sf office building, and 425 Lexington Ave., a 31-story, 675,612-sf design, both in New York City; and 1200 19th St. NW, an eight-story, 236,362-sf structure in Washington, DC.

Hime says there is no set goal as to the number of assets to be acquired or even a buying deadline. He says the partnership will "be responsive to market conditions." The partnership is seeking low-risk, well-located and high occupancy assets without deferred maintenance.

Steven Dwyer, Sumitomo's executive vice president, says scouts will be out looking for major properties in top markets in the US and Japan. The properties waiting to close--each 95% leased--are indicative of what will tempt an offer. The 23-year-old Park Avenue building is a design of I.M. Pei and it's anchored by Bloomberg LP. The Lexington Avenue high-rise, built in 1987 and designed by Murphy/Jann, is anchored by CIBC World Markets and the law firm of Simpson, Thacher & Bartlett. The lead in the 39-year-old Washington, DC building is Piper Rudnick.

Gerald D. Hines, in a press release, said the firm has strategically pursued asset management business since the mid-1990s. "This transaction," he said, "represents another major step in that direction and an important milestone for us." Hines gets the property management and leasing contracts for the properties. Morgan Stanley is acting as Hines' sole financial adviser for the deal-making.