Hines Buys Offices From Blackstone Unit for $197 Million
Hines Global REIT Inc. acquired three office buildings in a Boston suburb from Blackstone Group LP’s (BX) Equity Office unit for $197 million as property investors seek higher yields outside major cities.
Riverside Center in Newton, Massachusetts, has three buildings with about 510,000 square feet (47,000 square meters), Houston-based Hines said today in a statement. Tenants include online publisher TechTarget Inc. (TTGT), which has its headquarters in the 97 percent-leased complex, and McKesson Corp. (MCK), the biggest drug distributor in the U.S. The acquisition is the third in the area for the real estate investment trust.
“Boston is a market that Hines Global REIT has targeted for investment because of its diverse economy and highly educated workforce,” Chief Executive Officer Sherri Schugart said in the statement. “Riverside Center is a well-located, quality asset with strong tenancy that will fit well within our portfolio.”
Investors are buying commercial real estate outside large cities as they search for lower prices and better rates of return. Hines Global REIT purchased Riverside Center with a bridge loan from JPMorgan Chase & Co. (JPM) with a maximum borrowing amount of $150 million, the buyer said today in a filing with the U.S. Securities and Exchange Commission.
The loan has a 60-day term and an interest rate of the London interbank offered rate plus 1.75 percent to 2.75 percent, with an option to extend the maturity date by 30 days, according to the filing.
Newton is about 11 miles (18 kilometers) west of Boston.
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