By Jon Peterson
Houston-based Lionstone Investments still plans to be active in the markets of San Francisco and Seattle as it has signed an agreement to sell its company to Minneapolis and Boston-based Columbia Threadneedle Investments. The transaction with the sale of the company is projected to occur around the first of November and terms of the transaction were not released.
“We do expect that San Francisco and Seattle to be two of our active markets that we are trying to buy assets in going forward. We like the growth factors and the market fundamentals in both markets,” says Glenn Lowenstein, chairman and chief strategy officer with Lionstone. Overall, the manager has 17 markets in the United States that it tracks on a regular basis.
Lionstone has been an active buyer in the San Francisco market over the past year with two deals closing. One of these deals closed in June with the $60.45 million acquisition of the Wind River Campus in Alameda. The other happened at the end of 2016 with the $22.25 million purchase of 2120 University Avenue in Berkeley.
In Seattle, the company most recently purchased the Trulia Center located at 110 110th Avenue NE in Bellevue for $81.5 million in November of 2016. That property was bought through a partnership with Seattle-based Talon Private Capital. At almost the same time, Lionstone sold three lots in the Esterra Park development community in Redmond’s Overlake district to Lincoln Property Company and AvalonBay Communities separately for housing development opportunities. The lots were sold for a total of $49.5 million with an option to repurchase them if the new developers do not commence construction on their projects by a certain date.
The sale of Lionstone would mean that Columbia Threadneedle will expand its real estate efforts to the United States. Prior to the transaction with Lionstone, the company had no real estate expsoure to assets in the United States. All of its real estate exposure was a $10.5 billion portfolio that is all located in the United Kingdom. The investment manager is based in the United States with offices in Minneapolis and Boston.
When the sale of the company closes, Lionstone will become a wholly owned subsidiary of Columbia Threadneedle. The name of Lionstone will remain and there will be no change to the number of its employees. Lionstone plans to be the core real estate manager for Columbia Threadneedle in the United States.
Lionstone currently manages a portfolio valued at around $6 billion. The company is mostly known as a buyer of office buildings. The company owns 55 assets currently with 35 or 64 percent of its portfolio is in office buildings. The rest of its portfolio is made up of seven mixed use, six retail, 5 land, and one each in senior housing and residential assets.
Lionstone invests on behalf of some very large public pension funds in the United States. Two examples of this would be the California State Teachers Retirement System and Oregon Public Employees Retirement Fund.