Investcorp Finds Interest in Suburban Assets

NEW YORK CITY- Investcorp, acquired a 50% equity position in a portfolio of New York City suburban office buildings rolled-up and recapitalized by Broadway Real Estate Partners LLC. The portfolio of properties totals close to one million sf. The three assets included in the recapitalization were the 401,600-sf Three Huntington Quadrangle in Melville; 1979 Marcus Avenue in Lake Success, which is 348,000 sf; and the 236,000-sf Saxon Woods Corporate Center in Harrison. The sites are currently 94% leased, collectively.

Jonathan Dracos, Investcorp’s managing director, says among the reasons the firm leaped at the opportunity was because they liked the individual assets which, they felt, created a well-balanced portfolio. The new equity was used in part to retire mezzanine financing,which reduced average leverage from 77% to just under 70%. “For the right suburban markets, we are seeing increased leasing activity and improving occupancy. Over the last three years we have rarely acquired suburban office properties but, with the recovery, we are looking at this property type extensively in 2004,” Dracos says.