Great Portland Invests in Two Sites for $159M

LONDON-Great Portland Estates and Starwood Capital Group LP are forming a joint venture called the Great Star Partnership (GSP) to own two office complexes here. The venture is buying a 50% share in City Tower, at 40 Basinghall St., from the limited partnership owner for $43 million. Great Portland has also paid $116 million to purchase City Place House, at 55 Basinghall St., which will be added to the GSP venture holdings.

City Tower is a 20-story, 133,000-square-foot office just south of London Wall. The building is leased to 30 tenants, and is 16% vacant, with an average rent of $38.24 per square foot.

Great Portland purchased City Place House from Episo CPH LP, an entity of European Property Investors Special Opportunities LP, a property investment fund co-managed by AEW Europe and Tristan Capital Partners. Prupim and Cleary Gottlieb are two of the tenants of the 177,000-square-foot office, which is 100% leased to seven companies. The average lease is $57.97 per square foot, according to a statement by Great Portland, with a current annual rental income of $8.8 million. “Our intention is to refurbish the common parts and floors as appropriate, repositioning the building into a potential shortage of grade A space in the city from 2011,” said a company spokesman.