JV Gets $160-Mil Ticket to 1.8 Mil-SF Portfolio Sale

DALLAS-Three premier Texas office buildings and two Pasadena class-A properties have fueled a $160-million refinancing in a move to pay off existing debt and position the holdings for sale in the next 18 to 24 months.

The 1.8 million-sf Octagon Portfolio of the New York City-based Angelo, Gordon LP and San Diego-based Shidler Group have secured the three-year floating rate loan via a deal put together in 60 days by Dallas-based Holliday Fenoglio Fowler’s Los Angeles office. Jim Ingebritsen, a Shidler Group partner, tells GlobeSt.com that the bulk of the $160 million is being used to pay off an acquisition and development debt with Goldman, Sachs/Archon. The joint venture had bought the one-time seven-property portfolio in April 1998 from the Sinar Mas group of Jakarta, Indonesia.

“It was time to refinance,” Ingebritsen says, explaining the new loan will position the joint venture to sell the holdings and allow for additional capital improvements. The 794,000-sf, class-A 1301 Fannin St. in Houston is one property in particular that is being eyed for major capital improvements. The decision, says Ingebritsen, will be made in the next several months.

The other Octagon portfolio properties are the 449,041-sf Twin Towers at 8585 Stemmons Freeway in Dallas; 232,478-sf Atrium at Collin Ridge at 500 N. Central Expressway in Plano; 138,000-sf Pasadena Office Building along Los Robles Avenue in Pasadena; and the 296-room Pasadena Hilton. The portfolio has a 95% occupancy, with the hotel running in the high-70s for daily room bookings, says Ingebritsen.

The joint venture partners are in the process of subdividing the Pasadena properties, which sit on one large tract, to get it ready for when the time is right to sell. None of the buildings currently are listed, but that will change since all are ticketed to go, says Ingebritsen. It’s all part of the strategy of being “opportunistic real estate investors,” he explains. Millions, he says, have been poured into the repositioning and re-tenanting to set the stage for disposition.

The loan represents 70% to 75% of the portfolio’s value, Anita Paryani, Holliday Fenoglio Fowler’s associate director, tells GlobeSt.com. She and Scott F. McMullin, senior managing director in Los Angeles, have structured the refinancing, which is being provided by Deutsche Bank Alex Brown.