GlobeSt.com EXCLUSIVE: $750M-Plus Buyer Sets Sights on Texas

"We are actively soliciting sponsors in retail, office, industrial and multifamily so we can invest significant amounts of capital in Texas," Robert Brunswick, president and CEO of the Newport Beach, CA-based Buchanan Street Partners, tells GlobeSt.com. "Texas is one of the better states to uncover opportunities just because of its sheer size."

In two years, the firm's made two value-add buys in Texas, but that's expected to change with the hard push for more sponsors, specifically joint venture partners with hands-on experience or solid knowledge of local markets. "Texas stacks up very high because of its positive demographics and economic trends," Brunswick stresses. "Texas has cyclical ups and downs, but we're starting to see some good investment opportunities there."

The most recent deal teams Buchanan Street with Dallas-based Westmount Realty, which bought an empty 418,000-sf office building in Plano for $9.7 million. The repositioning plan includes $10.7 million for improvements to a single-tenant structure emptied in 2003 by Alcatel Corp. Westmount's plan is simple: fill 1000 Coit Rd. whether it's a single tenant or several. Buchanan Street Partners kicked in $7.8 million of equity for the play, set up by Craig Reed in the firm's headquarters office and Jim Richards with Houston-based Live Oak Capital.

In July 2002, Buchanan teamed with Lynch Investments LLC of Oakland, CA which was actively buying multifamily product in Houston. That deal cornered a deed to a 103-unit complex, Greenway Court, near the Galleria. About $7.5 million went into the purchase and improvements.

"The two-year timeframe between investments wasn't a conscious decision," Brunswick emphasizes. "We're starting to get more networked in Texas. As our name gets out, we will get more."

Brunswick is hoping to nail down another deal in the Lone Star State in "three or four months." Nothing is under contract but, he says, "we're looking at some things."

Buchanan Street Partners, a real estate investment bank, is deploying the 2005 allocation into principal equity investments to expand geographically, reserving its agency business, which is advisory in nature, for West Coast activity. The equity comes from a variety of sources, but it's all US capital waiting to be spent.

"Our investment appetite is not dictated by a certain amount of money," Brunswick explains. "It's driven by opportunity." The quest spans all product types and all scenarios, including recapitalization and ground-up projects.

Brunswick says the plan is to find opportunity-laced deals requiring $5 million to $15 million of equity and all-in total project costs of $15 million to $50 million for a three- to seven-year hold. As was the case with Westmount, the building can be empty. "A lot of equity players and investment players won't do empty buildings," he says. "We like the per pound analysis."