An affiliate of Oaktree
Capital Management, L.P. (“Oaktree”) in partnership with National
Financial Realty, Inc. (“NFR”), a privately-held investment company
based in Los Angeles, has acquired a portfolio of 40 office buildings
for $240 million from First States Investors B, L.P. The acquisition of
the 3.4 million-square-foot office portfolio, which is 90 percent leased
to Wells Fargo Bank, establishes NFR as the largest privately-held
investment firm focused on acquiring and operating properties leased to
regulated financial institutions.
“This off-market acquisition, principally backed by 11 years of Wells
Fargo credit, at a 50% discount to replacement cost, is another example
of Oaktree’s commitment to relationship based transactions with
well-positioned strategic operating partners like NFR, in addition to
lenders and borrowers in need of capital solutions,” said John Brady,
Managing Director and head of global real estate for Oaktree.
“Acquisition of this geographically diverse portfolio fits perfectly
into NFR’s investment strategy to acquire excellent properties leased to
leading financial institutions that offer reliable cash flow and
significant potential for appreciation,” said Vincent E. Pellerito,
President and CEO of NFR.
He notes that Wells Fargo has a credit rating of “AA” by Standard &
Poors and “A1” by Moody’s. “We also appreciate this opportunity to
expand our relationship with Wells Fargo beyond our current ownership of
its operation and data center in Hillsborough, Oregon,” Pellerito added.
The 40 buildings are leased on a long-term basis to Wells Fargo and
include mission critical operations facilities as well as branch offices
in eight Eastern and Southeastern states: North Carolina, South
Carolina, Virginia, Florida, New Jersey, Pennsylvania, Maryland and
Georgia. North Carolina is home to the largest share of the portfolio
with eight buildings totaling 1.2 million square feet including a
450,000-square-foot regional operation center in Raleigh and a total of
616,000 square feet in Winston-Salem. Second is Pennsylvania with five
buildings that comprise 600,000 square feet, including an almost
500,000-square-foot regional operations center in Philadelphia.
NFR was formed in 2006 by Pellerito who has structured more than $2.2
billion in global commercial real estate transactions over the past 20
years. The company’s direct ownership and operating interests include
142 properties with over 8.1 million square feet throughout the United
Complete list of Oaktree/NFR acquired properties can be found here.
Oaktree is a leading global investment management firm focused on
alternative markets, with $77.1 billion in assets under management as of
December 31, 2012. The firm emphasizes an opportunistic, value-oriented
and risk-controlled approach to investments in distressed debt,
corporate debt (including high yield debt and senior loans), control
investing, convertible securities, real estate and listed equities.
Headquartered in Los Angeles, the firm has over 700 employees and
offices in 13 cities worldwide. For more information visit www.oaktreecapital.com.
About National Financial Realty
Based in Los Angeles, National Financial Realty is a privately-held
investment firm capitalizing on commercial real estate market
inefficiencies. NFR’s proven performance and proprietary relationships
create extraordinary opportunities in special situations where rapid
capital deployment, transaction size, complexity, or current market
conditions may impede other investors. NFR executes timely investments,
typically in off-market transactions with solid fundamentals, limited
and controllable risk, predictable cash flow and significant potential
for appreciation. For more information: www.nationalfr.com.