42 buildings and 573,000 sq.ft. added to Tanenbaum Equity Partners portfolio
Tanenbaum Equity Partners (TEP), a subsidiary of Oklahoma City-based Gardner Tanenbaum, has acquired the CoreCivic National GSA Portfolio. The portfolio consists of 42-federally leased properties located in 11-states and totals more than 573,000 square feet. The total acquisition price has been confirmed as $106,500,000 before closing costs and construction capital reserves.
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TANENBAUM EQUITY PARTNERS, GARDNER TANENBAUM SUBSIDIARY, ACQUIRES CORECIVIC NATIONAL GSA PORTFOLIO (Photo: Business Wire)
The portfolio is primarily leased by the federal government to agencies such as the Social Security Administration, Office of Hearings and Operations, Military Entrance Processing, Department of Homeland Security and the Veterans Administration. Most of the assets were built-to-suit for the government.
"The acquisition brings TEP’s government leased portfolio to a total of 105 properties and we are actively seeking to further grow our GSA holdings into 2021," Richard Tanenbaum, TEP’s Founder and Managing Partner, said in a statement.
"This purchase was complex in nature as the Sellers needed to close by year-end 2020 to meet certain tax benefits of converting from a REIT to a Corporation. We had to maneuver through an intricate CMBS defeasance for 24 of the properties, tour the buildings within a 2-week period, and quickly get apprised of 17 outstanding construction projects all at various stages in process. TEP closed this portfolio within 35 days from the date we went under contract. This was no easy feat given the multifaceted nature of the package and current market environment due to the pandemic," concluded Tanenbaum.
TEP was represented in the transaction by both The Ficke Team of Colliers International, as investment sales representatives, and Marcus & Millichap Capital Corporation (MMCC) as financing intermediary and advisor.
A capital markets team at MMCC led by Sunny Sajnani, Todd McNeill and Brandon Wilhite secured acquisition financing from Arkansas-based Centennial Bank. The senior loan was structured as a fixed-rate bridge facility to acquire the 42-asset portfolio, and a line of credit to provide future funding for capital improvements and tenant improvement projects. Plans include 17 improvement projects on behalf of the federal government.
"With the quick speed of the transaction and number of properties involved in this acquisition, Centennial Bank was a great partner getting this deal across the goal line by the end of the year," said Sunny Sajnani, Senior Managing Director of Capital Markets with MMCC. "The complexity of this acquisition and the various construction projects currently ongoing and planned over the next 12-18 months required a lot of creativity and structuring from a financing standpoint to achieve the short and long-term goals of TEP."
"The purchase of these 42 CoreCivic assets marks the second portfolio we have sold to TEP in the last 18-months," said Geoff Ficke, Executive Vice President with Colliers International. "Just last year TEP purchased a 13-property national GSA portfolio we were marketing primarily in Michigan, Ohio and Florida. They are without a doubt one of the most active Buyers of federally leased product in the country and we are very pleased to have represented them in such a momentous transaction," said Ficke.
"One of the most intriguing aspects of this portfolio was the concentration of assets in core and secondary markets throughout the southeast, which continues to experience strong population migration and growing demographics. We believe these assets are well-positioned in TEP’s portfolio by size, location and agency. These correlate nicely with TEP’s strategy of long-term ownership."
About Gardner Tanenbaum & Tanenbaum Equity Partners
Gardner Tanenbaum is a privately-held, full-service real estate development firm based in Oklahoma City. Backed by more than 60 years of experience, the Gardner Tanenbaum portfolio includes more than 8 million square feet of commercial, industrial, and multi-family property. With strong leadership and a diversified portfolio, Gardner Tanenbaum cultivates Class A properties with long-term value for their clients and the communities they serve.
Tanenbaum Equity Partners (TEP) is a subsidiary of Gardner Tanenbaum focused solely on producing attractive risk-adjusted returns through domestic commercial real estate investments. TEP aims to assemble a portfolio of highly stabilized, income producing property, with best probability of renewal.
About Marcus & Millichap Capital Corporation
Marcus & Millichap, Inc. is a leading brokerage firm specializing in commercial real estate investment sales, financing, research and advisory services. As of December 31, 2019, the Company had 2,021 investment sales and financing professionals in 82 offices throughout the U.S. and Canada serving sellers and buyers of commercial real estate. The Company also offers market research, consulting and advisory services to our clients. The firm closed 9,726 transactions and sales volume of approximately $50 billion in 2019. For more information, please visit www.MarcusMillichap.com.
Marcus & Millichap Capital Corporation (MMCC) provides capital markets products for a wide range of investment property types. In 2019, MMCC closed over 1,900 commercial real estate financing transactions totaling $7.1 billion.
About Colliers International
Colliers International (NASDAQ, TSX: CIGI) is a leading diversified professional services and investment management company. With operations in 68 countries, our more than 15,000 enterprising professionals work collaboratively to provide expert advice to maximize the value of property for real estate occupiers, owners and investors. For more than 25 years, our experienced leadership, owning approximately 40% of our equity, has delivered compound annual investment returns of almost 20% for shareholders. In 2019, corporate revenues were more than $3.0 billion ($3.5 billion including affiliates), with $33 billion of assets under management in our investment management segment.
CoreCivic National GSA Portfolio, acquired by Tanenbaum Equity Partners, a subsidiary of Gardner Tanenbaum, December 2020.
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