Brookfield acquire Verde Realty REIT for $366m
Brookfield Strategic Real Estate Partners (BSREP), have reached an agreement to acquire Verde Realty for $366m. The Houston-based REIT, which invests and develops in industrial properties, is the first global real estate opportunity fund for Brookfield Asset Management.
Toronto based BSREP held a first close on $2.1 billion commitments in May. It raised capital from several investors, including the New York City Pension Funds and the Teacher Retirement System of Texas. The fund which has no hard cap, and a target of $3.5 billion, has not called any capital to date.
Due to close in the fourth quarter, the transaction is awaiting approval during a shareholder meeting scheduled for the 29 August. Upon closing, BSREP Industrial Merger Sub, a subsidiary of the fund, will be merged into Verde Realty. Verde will remain as the surviving entity. The agreement requires the fund to acquire at least 55% of Verde, on a fully diluted basis.
Verde purchases, develops and manages real estate assets in Mexico and the US. According to REIT’s first quarter financial statements, Verde owned $119 million in land, and $759 million in operating properties, as of March 31st.
Brookfield announced that in addition to the agreement, Hillwood would be an investor in Verde following the merger. A $1billion joint venture between Hillwood and Brookfield will acquire and manage warehouses and other industrial properties in the US.
Verde will become part of Brookfield Property Partners (BPY), a new entity likely to spin off Brookfield later this year. It is expected that where BSREP was the first Brookfield fund, BPY will be the lead investor.