Behringer Harvard has completed its acquisition of listed office company IPC US REIT for approximately $1.4 billion. IPC is a Toronto-based REIT that owns a 9.6 million sq. ft. portfolio of U.S. office buildings.
The acquisition, which included all IPC subsidiaries, adds 34 properties to Dallas-based Behringer Harvard’s portfolio. The acquired space had an average occupancy of 92.2% at closing. Together, the company’s 76 office properties encompass more than 25.1 million sq. ft. and represent approximately $4.8 billion in acquisitions.
"The IPC US REIT properties will complement the already robust portfolio we’ve built in Behringer Harvard REIT I Inc.,” says Robert M. Behringer, founder and CEO of Behringer Harvard. “This is a strategic purchase that further diversifies the portfolio from a geographic perspective and at the same time strengthens its presence in existing markets such as Philadelphia, Houston and Baltimore.”
Behringer Harvard assumed approximately $800 million of IPC US REIT debt and funded the remaining $600 million of the purchase price with equity, making the deal 57% loan-to-value (LTV). Many buyers in recent years have executed 80% to 90% LTV financing on deals, so the IPC purchase likely reflects the conservative underwriting parameters in place since the onset of the credit squeeze.
Wachovia Securities advised Behringer Harvard on the transaction and Baker & McKenzie LLP provided legal counsel to the buyer.