Oaktree deal - question
http://costarfinance.com/2014/08/13/barclays-bank-wins-335m-whole-loan-… Oaktree is buying these three 'business parks' in the UK that are 91% occupied. But they also mention 'development opportunity.' Do they mean the deal includes some undeveloped land?
It could mean that. It could also mean that they have plans of redevelopment in the future (once tenants expire and the owner has the freedom of doing whatever they want with the site).
For example, my firm just purchased a building that is 100% occupied. We are intending of getting the site re-entitled for a different use (multifamily vs what it is currently - all retail). So, although the building is 100% occupied, the site also provides a development opportunity.
Good point, a good example with the same logic is Regency's hostile bid for AMReit.... That portfolio is pretty leased up but it comes with some great locations and a big push into Texas. They'll be reformatting most of those properties rather than just buying and holding a leased up 30 property portfolio
^Agreed. Likely the current use isn't the "highest and best"
Tangentially speaking business parks are one of the few asset classes that have not recovered to peak sales/rents, a lot of value to be added if you can find the right operator to deal with 200 tenants
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