Hines-CalPERS JV Reaps $2B From Sales, Eyes $1B Buying Plan

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"The partnership is alive and well," Daniel MacEachron, senior vice president and NOP portfolio manager for the locally based Hines, tells GlobeSt.com, "and the challenge for 2005 is to find investment opportunities." The partnership is under contract to acquire the Harris Bank Building in Chicago. When that deal closes, the NOP portfolio, with five class A buildings, will be valued at roughly $650 million. One asset is 1100 Louisiana in Houston, which was on the market but didn't sell.

NOP picked up $450 million in the final round of sales. The buildings, totaling three million sf, are Woodside Technology Center in Redwood City, CA; 505 Montgomery in San Francisco; 601 California in San Francisco; the Chancellory in Itasca, IL; and RiverPark in Norwalk, CT.

Rreef acquired Woodside Technology Center and 505 Montgomery. An investment partnership represented by Hamilton Partners and Kennedy Associates Real Estate Counsel Inc. bought the Chancellory and a public pension fund represented by Lincoln Property Co. took over 601 California. CB Richard Ellis Investors scooped up RiverPark. The disposition began with 13 properties. "We were prepared to sell all of them," MacEachron says. "But, in all cases it was clear that we would sell only if we could get strong pricing. I didn't think we would sell as many as we did or that pricing would be as strong as it was across the board."

MacEachron says record-level per sf pricing was achieved in Washington, DC, Greenwich, CT and Seattle. As previously reported by GlobeSt.com, TIAA-CREF bought 1001 Pennsylvania Ave. and 1900 K Street, both in Washington, DC; the IDX Tower in Seattle; 50 Fremont in San Francisco; and Stoneridge Corporate Plaza in Pleasanton, CA; Willrich Holdings, a joint venture between the Willett Cos. and Warren & Partners, purchased 55 Railroad in Greenwich; and Rreef picked up Riverfront Office Park in Cambridge, MA.

Houston's 1100 Louisiana "received reasonably strong bids," MacEachron says. "The offers were good, but not in the zone of what we wanted to sell for." The pricing clearly was impacted by the city's office leasing market and Shell Oil Co. terminating a 200,000-sf lease. "It's fair to say that it was a factor in not getting a stronger price," he says.