Beacon Buys $547M Worth of Offices

MIAMI—Beacon Investment Properties has acquired seven office buildings nationwide covering 3.1 million square feet in the past six months. Total investment was $547 million.

The acquisitions—which span Atlanta, Houston, Dallas, and Minneapolis, signal a portfolio shift for Beacon from smaller class B office buildings to class A office towers in prime locations in major U.S. cities in the Southeast, Midwest, and Texas.

“Our new focus ranges from stabilized, high occupancy, cash flowing office properties in strategic locations to value added office buildings needing renovation and repositioning  to architectural landmarks where office space will always be in demand,” says Ariel Bentata, Beacon's co-founder and chief investment officer. The recent acquisitions give Beacon more than $1.1 billion in commercial real estate assets and over 7.5 million square feet of properties under management.

Properties acquired by the 10-year-old company in the last six months include: The Platinum Tower in Atlanta for $48.1 million; 2626 Cole in uptown Dallas near Turtle Creek; One City Center in Houston's Central Business District; Ashford, a 93%-leased office complex in Houston's Energy Corridor; and IDS Center, a 57-story, 1.43 million- square foot office and retail complex in Downtown Minneapolis for $253 million. The IDS Center was part of a joint venture between  Beacon Investment Properties and Tel Aviv-based Harel Insurance, Investments & Financial Services, and Menora Mivtahim Insurance.

“We only buy properties at below market value and well below replacement costs,” Bentata says. “We are fortunate enough to have global institutional investor-partners and lenders that allow us to us to close quickly on opportunities where the seller wants a timely execution.”

Instead of outsourcing management of its properties, Beacon built and staffed its own property management company known as Beacon Real Estate Services. Claudio Dombey, a co-founder and managing member, says Beacon's goal over the next 12 months is to continue to expand its portfolio in its core markets to 10 million square feet under management.

“As the marketplace for office buildings recovers, we are confident that  in working with institutional sellers whose holding period is ending, lenders with distressed properties we can recapitalize and top-tier brokers,” he says. “We're investing principally in fast-growing metropolitan areas with a pro-business atmosphere, a history of strong employment growth, large pools of skilled talent, low taxation, low cost of living, international airports, marine ports and distribution hubs, significant immigration and other economic drivers.”  

Commercial real estate brokers, investors and advisors contend that the Hallandale Beach, FL company is a serious buyer. Danny Miller, senior managing director in the Houston office of HFF, says, “After executing more than half a dozen deals with Beacon, they clearly have a reputation with us for doing what they say they will do in the time frame they commit to doing it, without a retrade.”

Russell L. Ingrum, vice chairman and managing director of CBRE in San Francisco, called Beacon a first-class, reliable buyer. He noted, “They've always performed on time and seamlessly in transactions with our firm.” And Rodney Richerson, regional president-central U.S. for KBS Realty Advisors in Newport Beach, CA, said his firm has “done multiple deals with Beacon and we find them conscientious and committed to making certain the seller's needs and requirements are met. For us, they are a buyer of choice.”