Jonathan Dracos, Investcorp's managing director, says among the reasons the firm leaped at the opportunity was because they liked the individual assets which, they felt, created a well-balanced portfolio. The new equity was used in part to retire mezzanine financing,which reduced average leverage from 77% to just under 70%. "For the right suburban markets, we are seeing increased leasing activity and improving occupancy. Over the last three years we have rarely acquired suburban office properties but, with the recovery, we are looking at this property type extensively in 2004," Dracos says.
Broadway Partners marketed the assets as a portfolio in order tooptimize value and attract institutional capital. Scott Lawlor, CEO of Broadway Partners, says the recapitalization "allowed them to take advantage of an attractive valuation while maintaining the option to continue to own the assets." He adds that an "efficienttax structure provided significant benefits to those who reinvested."
Locally based Broadway Real Estate Partners is aprivate real estate investment and management firm has purchasedapproximately four million sf of office space with a total valuein excess of $900 million. The also locally based currently oversees a portfolio with a current value of more than $2 billion in selected urban and suburban markets.
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