Workspace Property Trust Lands $326M Infusion

One Country View Road, Malvern, Pa. Image via Google Street View

Workspace Property Trust has just found the support it needs to take its business to the next level, and the assistance came from alternative investment firm Oak Hill Advisors. OHA recently led an investment in Workspace totaling $326.5 million—enough funds for the suburban office and industrial company to position itself for expansion.

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OHA put its money behind Workspace, impressed by the young company’s operating history and standing as one of the largest privately held owners of suburban office and light industrial properties.

Workspace launched in 2015 and within a year of its opening, the company had acquired more than $1.2 billion of assets. Today Workspace owns and operates a portfolio that consists of 10 million square feet of properties. However, it isn’t Workspace’s foothold in the industrial sector—currently at the top of the real estate investment community’s list of favorites due to the e-commerce-induced high demand for the product—that piques OHA’s interest the most. OHA is keen on backing Workspace’s growth pursuits in the suburban office sector.

Glenn August, founder & CEO of Oak Hill Advisors, said in a prepared statement that Workspace is “in a terrific position to expand geographically and satisfy the demand for affordable, accessible suburban office space.”

Presently, Workspace has a presence in markets across South Florida as well as in Tampa, Fla., Phoenix, Minneapolis and two suburban Philadelphia markets.

Not all office is the same

4631 Woodland Corporate Blvd., Tampa, Fla. Image via Google Street View

Overall, the office sector continues to struggle from the consequences of the global pandemic; however, certain sub-sectors, including life science space, have thrived amid the chaos. OHA believes the suburban office sector has strong secular tailwinds, and industry research supports the firm’s assertions.

At the end of the second quarter of 2021, suburban office assets continued to drive price growth, according to research from Real Capital Analytics, recording a year-over-year increase of 4.5 percent, while central business district office prices plummeted 5.5 percent. And as noted in a third quarter 2021 outlook report by FS Investments, “Suburban and life sciences office space represent notable opportunities despite macro uncertainty.”