Wells Fargo Building SOLD - Hertz Investment Group Announces Largest Acquisition in Company History with Southeast Portfolio Purchase

Deal Includes Properties in Louisiana, Alabama and Carolinas

"SANTA MONICA, CA (June 8, 2015) – Hertz Investment Group (HIG) today announced it has acquired from Equity Commonwealth a portfolio of six Class A office buildings in the Southeast totaling more than 3-million square feet.
Hertz purchased the properties, the largest acquisition in company history, for $417,450,000. The commercial office buildings will expand Hertz’s holdings in the New Orleans market and serve as Hertz’ entry into three new cities: Birmingham, Alabama; Columbia, South Carolina; and Greensboro, North Carolina. The assets and locations include:

·         One Shell Square, a 51-story tower with 1,256,971 square feet, New Orleans Central Business District (CBD)
·         Wells Fargo Tower, a 30-story tower with 514,893 square feet, Birmingham CBD
·         Inverness Central, a four-building complex with 475,895 square feet, suburban Birmingham
·         Meridian, a 17-story tower with 334,075 square feet, Columbia CBD
·         300 N. Greene Street, a 21-story tower with 324,075 square feet, Greensboro CBD
·         20th Place South, a four-story office building with 125,722 square feet, suburban Birmingham

“This portfolio of properties represents a significant opportunity for a number of reasons, including an acquisition price to acquire Best in Class assets significantly lower than Class A construction costs,” said Judah Hertz, company chairman. “The properties were acquired from a public REIT that decided to exit the region, which allowed us to enter vibrant, key cities in the Southeast and own properties with a diverse tenant mix.”
The six properties combined boast an occupancy rate of 88.8 percent occupancy as of the closing date.
One Shell Square, the tallest building in Louisiana, is 93.5-percent leased, and major tenants include Shell Oil, Adams and Reese, LLP, and Liskow & Lewis.
The combined properties in Birmingham will provide Hertz entry into both the downtown and suburban markets. The Wells Fargo Tower is considered a premier property in Alabama’s largest city. Tenants include the regional headquarters of Well Fargo Bank as well as Burr & Forman and Baker Donelson law firms. Inverness Center and 20th Place South are home to BB&T, Southern Company and SunGard.
The portfolio also allows Hertz to enter the dynamic and fast-growing Carolinas area. Meridian, which is 91-percent leased, is located in a city that serves as home to the state capitol, the economic commercial hub and the University of South Carolina. 300 N. Green Street, which is 83.5-percent leased, offers a stunning architectural design across the Greensboro skyline.
“Hertz Investment Group views these new markets as outstanding and extraordinary opportunities,” said Gary Horwitz, President of Hertz. “One of our primary strategies is to find outstanding office buildings in the central business districts of mid-sized cities. To acquire four in one deal is extremely rare and exciting for our company.”
Hertz’ previous largest acquisition had been 1.7-million square feet of office space purchased from Parkway Properties, now based in Orlando, Florida, in April 2012. That deal included 13 properties in three markets.
Seeing opportunities in many markets, Hertz’s aggressive acquisition strategy has resulted in several major acquisitions over the last 12 months, including:
  • Fifth Third Center, a 508,397-square-foot tower in Cleveland, Ohio
  • Chestnut Place, a 218,621-square-foot building in Worchester, Massachusetts, a suburb of Boston
  • South Point Business Park, a 395,920-square-foot property built as headquarters for Worldcom, a one-time Fortune 50 company. It is located in the Jackson, Mississippi, market.
  • Bank of America Tower, a 696,672-square-foot, 42-story tower that is the tallest building in Jacksonville, Florida
Monday’s announcement of the six-building portfolio puts an exclamation point on the company’s activity over the last year.

“We would have been interested in acquiring each of these properties individually,” said Jim Ingram, Hertz Executive Vice President and Chief Investment Officer. “The ability to acquire all six assets at one time distinguished us from other investors, allowing us to make this investment. This is a big step for HIG toward our goal of owning 20 million square feet of best in class assets.”"

- A Press Release

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