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Class-A Office Owners Columbia Property Trust, Allianz Real Estate Form $1.26B JV

Allianz, Columbia Property Trust JV
University Circle in Palo Alto, 333 Market St. in San Francisco and 114 Fifth Ave. in New York are the three properties contributed to the joint venture.

Columbia Property Trust and Allianz Real Estate have joined forces with the creation of a JV. Through the JV, the companies will acquire and manage Class-A office properties in select gateway markets.

“Our joint venture with Allianz is the right vehicle for increasing scale within our core markets,” Columbia Property Trust President and CEO Nelson Mills said. “This partnership allows us to increase market presence without issuing stock or raising leverage.”

The two companies have initially contributed three unencumbered properties with a combined gross asset value of $1.3B to the JV. Columbia added two properties from the San Francisco Bay Area, including its University Circle property. This 451K SF office complex in Palo Alto is worth $540M. Columbia also contributed its asset at 333 Market St., which is a 657K SF tower in the Financial District worth $500M.

Class-A Office Owners Columbia Property Trust, Allianz Real Estate Form $1.26B JV
University Circle in East Palo Alto

Allianz added 114 Fifth Ave., a 35K SF office building in Manhattan valued at $220M. Allianz has owned 114 Fifth Ave. since 2015 along with its 1% partner, L&L Holding Co. The 19-story office tower is fully leased and recently underwent a $45M renovation. It is in the Flatiron District of Midtown South and offers historic architecture, tall ceilings and large floor plates.

As a result of these transactions, Allianz now owns a 22.5% interest in University Circle and 333 Market St., while Columbia owns 77.5%. Columbia will continue to oversee property management and leasing at these two properties and management of day-to-day operations of the JV. At 114 Fifth Ave., Columbia and Allianz each own 49.5%. L&L retains its general partnership stake and will continue as the property management and leasing agent.

Within the next 12 months, Allianz will increase its ownership interest in both University Circle and 333 Market St. to 45%, adjusting Columbia’s ownership to 55% and self-funding the venture for Columbia.