Mission West to Liquidate, Sell Properties to DivcoWest, TPG

Mission West Properties Inc. (MSW), a California real estate investment trust that put itself up for sale in December, agreed to sell certain property assets to a venture of closely held DivcoWest and TPG Real Estate.

The joint venture will pay about $400 million in cash and assume $398 million of debt and other obligations, Cupertino, California-based Mission West said in a statement. Some of the company’s operating partnerships will retain other assets and liabilities with an approximate net value of $525 million.

Mission West said it plans to liquidate after it completes these transactions by year-end. The company said shareholders and owners of operating partnership units that choose to redeem their stakes will receive a distribution of $9.20 to $9.28 a share in cash, though the final amount might be less. The distribution estimate includes the sales proceeds and the final 2012 dividend.

Mission West owns and manages 101 research and development properties, most in Silicon Valley, totaling about 7.6 million rentable square feet (706,000 square meters). The company began exploring a sale late last year to take advantage of growing investor interest in commercial real estate.

DivcoWest is a San Francisco-based real estate investment firm founded in 1993. TPG Real Estate is a unit of the TPG Capital private equity firm started by David Bonderman and James Coulter.

To contact the reporter on this story: Hui-yong Yu in Seattle at hyu@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

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