Singapore’s GIC Jointly Buys Majority Stakes In 53 US Office Bldgs

USA – Singapore’s sovereign wealth fund GIC has teamed up with American commercial real estate player Workspace Realty Trust to acquire majority stakes in 53 suburban office buildings, reported The Real Deal on Monday evening (29 August, SGT).

The transaction collectively values the office properties at a whopping US$1.1 billion. The assets are scattered across the United States, but many are concentrated around Dallas, Atlanta, and San Francisco.

The office deal, which closed on Friday, was jointly financed by Bank of Montreal and JPMorgan Chase. The vendor was Griffin Realty Trust, which intends to keep a minority stake in all of the suburban office buildings.

With the transaction, Workspace will add over 18 million sq ft of office space to its portfolio, almost doubling its current holdings.

The move by Singapore’s GIC and American partner Workspace Realty Trust represents a billion-dollar bet on suburban office buildings as the future workplaces.

While the America’s suburban office market had faced the same difficulties as its urban office market during the onset of the COVID-19 pandemic, there’s renewed interest in suburban commercial properties amidst flexible work arrangements, wherein staff can work in offices closer to their homes.

Based on data from real estate consultancy CBRE, the vacancy level of downtown office markets in Q2 2022 exceeded that of its suburban counterparts for the first time in decades, at 17 percent and 16.8 percent respectively.

The transaction is among the latest bets by GIC and Workspace Realty Trust that the shift away from downtown office buildings could be permanent.

In Q2 2021, the company secured a US$326 million investment from Oak Hill Advisors, in which Workspace Realty Trust intended to utilise the debt and equity investment to make another US$5 billion in acquisitions over the next 5 years.