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Hines Interests Closes on EOP's Sacramento Assets

SACRAMENTO-The sponsor of Hines REIT and various funds closes on 32 buildings here for its Core Office Trust and US Value Added Office Fund.

By Brian K. Miller | Updated on May 04, 2007

SACRAMENTO-Hines-Sumisei US Core Office Trust and Hines US Value Added Office Fund II LP have closed on their estimated $750-million acquisition of the local assets of Equity Office Properties Trust, which was taken private earlier this year by Blackstone Group. The 2.5-million-sf, 32-building portfolio was split between the two funds.

The Value-Added fund took 1.1 million sf in 17 suburban buildings in nine projects located in the South Natomas, Point West, and Campus Commons submarkets. The Core fund took 1.4 million sf in 15 buildings in six projects in the central business districts of Sacramento and Roseville. Hines Interests LP, the Houston based sponsor of both the REIT and the fund, will handle the fee-based leasing and management assignments.

The price paid by the Value-Added fund has not been publicly released. However, multiple sources have put the overall cost of the transaction at $750 million, and the Core fund’s piece was acquired for $490.2 million (exclusive of transaction costs, financing fees and working capital reserves) in cash and debt, according to SEC filings by Hines REIT, a subsidiary of which owns a stake in the Core fund.

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