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Workspace Property Trust and sovereign wealth fund GIC Pte. Ltd., based in Singapore, will acquire a majority stake in 53 suburban U.S. office buildings in a deal that values the properties at about $1.1B.
The seller, Griffin Realty Trust, will retain a minority stake in the assets.
“We believe the pandemic really accelerated the shift to suburban offices,” Workspace co-founder and CEO Thomas Rizk told The Wall Street Journal.
In June, CBRE reported that U.S. suburban office metrics recovered modestly, with the overall vacancy rate for that kind of asset dropping by 10 basis points to 16.8% in Q2 2022. Downtown vacancies came in at 17% during the second quarter, representing the first time in more than 20 years that the downtown vacancy rate surpassed the suburban rate.
The sale will nearly double the size of Florida-based Workspace's holdings to 18M SF, with about 200 buildings in 22 major metro markets nationwide.
The sale reduces debt on the company's balance sheet and "de-risks its portfolio in consideration of current capital market conditions and the continued pressure that pandemic-related work-from-home trends are exerting on leasing demand and property valuations in the office sector," Griffin President and CEO Michael Escalante said in a statement.
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