The investment arm of The Kingdom of Bahrain — Bahrain Mumtalakat Holding Company — has acquired an undisclosed partnership within Los Angeles-based Regent Properties, which has a number of properties in Dallas-Fort Worth and is seeking to acquire or develop additional real estate.
The sovereign wealth fund acquired an interest in a portfolio in Dallas-Fort Worth and Phoenix with an aggregate value of $250 million. In Dallas-Fort Worth, the portfolio includes:
- Bent Tree Tower II at 16479 Dallas Parkway in Addison
- One Panorama Center at 7701 Las Colinas Ridge in Irving
The deal comes after Regent Properties decided several years ago to diversify its investor base with capital from Asia and the Middle East, Regent President Eric Fleiss told the Dallas Business Journal.
“We have a wonderful stable of investors, which are domestic for the most part, but in the last few years we have seen a dramatic interest in U.S. real estate from foreign entities and foreign sovereign wealth funds and we wanted to introduce them to what we do,” Fleiss told me.
“We looked at sovereign wealth funds, not just in the Middle East, but in other parts of the world,” he added.
Those funds typically invest in the coastal cities, such as New York or Los Angeles, but when Regent Properties showed investors the return-on-investment in Dallas and Phoenix, they were sold.
“Dallas has a diverse base of tenants in a market that’s seeing dynamic growth with a number of relocations,” Fleiss told me. “There is an impressive set of fundamental metrics in Dallas and Phoenix. You can also buy assets in the Sunbelt markets for cheaper and get a lot more return than the coastal markets with a lot less risk. It really intrigued investors.”
With this investment, Mumtalakat will join other Regent Properties investors, such as BlackRock, CAM capital and other endowments and pension funds.
“This transaction, our third investment in the United States in less than two years, is in line with our ongoing strategy to partner with reputable international businesses looking for growth capital with a long-term investment horizon,” said Mumtalakat CEO Mahmood Hashim Alkooheji, in a statement.
The fund was attracted to Regent’s portfolio and the attractive risk-reward profile of the properties, he added.
Fleiss said Regent Properties is looking to continue it expansion of Dallas-Fort Worth holdings and said the company is “very committed to Dallas.”
Meanwhile, Regent Properties’ big redevelopment of the former Texas Instruments campus in East Plano seems to be going well, with “significant construction,” expected to get underway soon. The mixed-use redevelopment — which has been renamed Legacy Central — isn’t a part of the investment deal with The Kingdom of Bahrain.
The $120 million redevelopment of the former office campus is expected to undergo significant construction by the end of the summer, with some demolition work taking place as Texas Instruments’ operations wind down on the Spring Creek Parkway campus.
“Most importantly, we have 12 million square feet of tenants in active discussions of tenancy and we’re seeing a tremendous demand,” Fleiss told me. “We don’t see that demand from any other city from a growth point of view.”
Texas Instruments is currently occupying two of the four buildings on the campus, which the company is leasing through the end of the year.
Along with the existing buildings, Regent Properties also could develop built-to-suit, mid-rise office buildings on the property’s available land. In all, the campus is entitled for up to 3.7 million square feet of real estate.
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