Workspace Buys Suburban Office Portfolio for $170M
Griffin Realty Trust sold the properties in the deal which is valued at roughly $1.3 billion.
A consortium led by Thomas A. Rizk and Roger W. Thomas, the founders of Workspace Property Trust, has purchased a majority stake in six class A suburban office buildings for $170.4 million. Griffin Realty Trust sold the properties, which total one million square feet and are located in five separate markets. It will retain a minority ownership in the portfolio.
The six buildings are located in suburban Chicago, Dallas, San Jose, Cincinnati and Greensboro. The deal is valued at roughly $1.3 billion.
Targeting suburban offices has become a mainstream strategy, Rizk said in prepared comments. “The suburbs continue to perform well, characterized by continued robust leasing activity fueled by strong demand from larger, national tenants to increase their footprint outside of central business districts.”
According to a recent CBRE report, the downtown vacancy rate climbed 40 basis points quarter-over-quarter to 17.4%, while the suburban vacancy rate increased by 20 basis points to 16.9% and the third quarter 2022 marked the second consecutive quarter in which the downtown markets surpassed the suburban vacancy rate.
UBS provided the debt financing and Newmark Group served as advisor to Workspace on the debt financing. Seyfarth Shaw LLP and McCausland Keen + Buckman served as legal counsel to Workspace. Jordan Bock, founder of real estate investment firm Mason Capital, served as strategic advisor and partner to Workspace and the consortium.
In August, Workspace and Griffin completed a blockbuster transaction in which Workspace acquired 53 Class A suburban office buildings on 41 separate properties from Griffin in a $1.132 billion deal, with Griffin retaining a minority ownership in the portfolio.