NEW YORK CITY-In their first acquisition through a recently formed joint venture, locally based Elman Investors Inc. and Kuwait-based Muthanna Investment Co. have closed on a pair of office buildings 100% leased to the federal government. EII president Lee Elman tells GlobeSt.com the combined value of the properties was $59 million.
One of the properties, the Omaha regional office of the Federal Bureau of Investigation, is described as the bureau’s most advanced facility from a building design standpoint, Elman says. The seller was the 112,000-square-foot property’s developer, Omaha-based Noddle Cos. The other property is a Social Security Administration office in Montgomery, AL, which EII and Muthanna acquired from MHG LLC.
Founded in 1979, EII in recent years has focused on properties leased to government tenants, including municipal, county and state agencies as well as federal offices, although it has also acquired and managed retail and industrial assets. Muthanna, a newcomer to US commercial real estate, saw government properties as “a good asset area,” says Elman.
In a release, Muthanna general manager Abdulaziz Almarzooq says his company was attracted to the assets “based on the generous current yield in light of the tenant credit strength, the long remaining lease term and high quality of construction.” Greenwich, CT-based Arch Street Capital Advisors structured and arranged the transaction on behalf of Muthanna, which Almarzooq says hopes to expand its US presence during 2011.
To date, EII has acquired about 3.7 million square feet of properties with a combined value north of $514 million. “We’re looking to get that up to $1 billion in the next couple of years,” Elman says.
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