The RMR Group announced an agreement between RMR and ABP Trust, by which RMR is committing $100 million and the Portnoy Family Office is contributing $206 million of owned office properties to launch the RMR Office Property Fund.
The fund will be a private, open-end core fund focused on the acquisition, ownership and leasing of a diverse portfolio of office properties throughout the United States.
The fund plans initially to focus its investments in middle-market, multi-tenant office buildings located in urban infill and suburban locations in non-gateway U.S. markets. The fund considers middle-market office properties to be larger than 50,000 square feet but valued at less than $100 million. The fund will be marketed to private investors and is targeting 8 percent to 10 percent annual returns through a combination of current income and long-term capital appreciation.
RMR has made a $100 million commitment to the fund and this capital is expected to be drawn and invested by the fund within the next year. RMR will manage the fund.
The properties being contributed to the fund by the Portnoy Family Office include 15 office properties with 1.1 million rentable square feet. On a combined basis, these properties are currently 89 percent occupied.
The properties are located in Austin, Northern Virginia, suburban Boston, and suburban Philadelphia.
The Portnoy Family Office previously acquired these properties and they are being contributed to the fund at a value of $206 million.
“With approximately $30 billion of assets under management and almost all these assets consisting of investments in commercial real estate that are owned by publicly traded equity REITs, forming a fund that makes investments in commercial real estate for private investors is a natural extension of RMR’s business,” said Adam Portnoy, president and CEO of RMR. “By focusing on middle-market, multi-tenant office properties in urban infill and suburban locations,.”
The fund’s general partner will be a wholly owned subsidiary of ABP Trust. ABP Trust is a private company that directly and indirectly owns approximately 52 percent of the economic interest in RMR as well as has investments in other related businesses and commercial real estate.
