{"id":1004182892,"date":"2017-07-05T01:40:44","date_gmt":"2017-07-05T09:40:44","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004182892"},"modified":"2022-12-08T13:43:56","modified_gmt":"2022-12-08T21:43:56","slug":"canadian-fund-to-buy-houston-reit-in-1-2b-deal","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/canadian-fund-to-buy-houston-reit-in-1-2b-deal\/","title":{"rendered":"Canadian Fund to Buy Houston REIT in $1.2B Deal"},"content":{"rendered":"

By Scott Baltic, Contributing Editor <\/em><\/p>\n

\"Hilary<\/a>

Hilary Spann, managing director & head of U.S. Real Estate Investments for CPPIB<\/p><\/div>\n

It might be mid-summer in North America, but that didn\u2019t chill the Canadian Pension Plan Investment Board\u2019s interest in moving (a big chunk of its money) to Houston. For $1.2 billion, or $23.05 per share, CPPIB will be acquiring Parkway Inc., a Houston-based REIT with a major presence in its home city, the two companies announced last Friday.<\/p>\n

The per-share consideration consists of $19.05 per share plus a $4.00 special dividend to be paid prior to closing and represents a premium of about 14.3 percent versus Parkway\u2019s 30-day volume-weighted average price ended June 29.<\/p>\n

The transaction is not subject to a financing condition and is expected to close in the fourth quarter. Parkway\u2019s board unanimously approved the agreement. TPG Capital and its affiliates, which own about 9.8 percent of Parkway\u2019s outstanding common stock, have agreed to vote in favor of the transaction.<\/p>\n

Parkway’s strong local presence<\/h2>\n

\u201cWe believe there are still some near-term headwinds in the office sector for Houston, but the implied asset valuation of this transaction shows CPPIB\u2019s appreciation for the high-quality portfolio we have assembled and the near-term stability it provides during the current downturn in the market<\/em>,\u201d James Heistand, Parkway\u2019s president & CEO, said in a prepared statement.<\/p>\n

Parkway owns the largest office portfolio in Houston, totaling about 8.7 million square feet across 19 properties. Located in the Westchase, Greenway and Galleria submarkets, the high-quality office properties are 87.6 percent leased and reportedly are anchored by \u201ca broad mix of strong tenants in financial services, technology and commodities businesses.<\/em>\u201d<\/p>\n

\u201cParkway fits well with CPPIB\u2019s long-term real estate strategy to hold stable, high-quality assets in large U.S. markets<\/em>,\u201d Hilary Spann, managing director & head of U.S. Real Estate Investments for CPPIB, said in the prepared statement. \u201cThrough this investment, CPPIB gains additional scale in Houston<\/em>.\u201d<\/p>\n

CPPIB declined to comment further on the transaction.<\/p>\n

CPPIB’s Holdings<\/h2>\n

In a $141 million transaction earlier this year, CPPIB acquired a 24.5 percent stake in a Houston office portfolio<\/a> sold by a Parkway affiliate, which retained a 51 percent stake. The other 24.5 percent of the 11-building, 5 million-square-foot Greenway Portfolio was purchased by a joint venture of TH Real Estate and Silverpeak Real Estate Partners.<\/p>\n

CPPIB also has a 40 percent stake in Alden Bridge Village Center, a grocery-anchored retail center in The Woodlands, a Houston suburb, a spokesperson told Commercial Property Executive<\/em>.<\/p>\n

CPPIB invests funds not needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of its 20 million contributors and beneficiaries. At the end of the first quarter, the CPP Fund totaled C$316.7 billion (US$244.7 billion).<\/p>\n","protected":false},"excerpt":{"rendered":"

CPPIB will be acquiring Parkway Inc., which has a strong local presence, with an office portfolio of about 8.7 million square feet across 19 properties.<\/p>\n","protected":false},"author":882,"featured_media":1004182898,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21743,21808,1589,21783,21742,21747],"tags":[33308,36578,33073,35124,32870,33184],"class_list":["post-1004182892","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-deals","category-featured","category-houston","category-investment","category-latest","category-office","tag-canada-pension-plan-investment-board","tag-james-heistand","tag-parkway-properties-inc","tag-silverpeak-real-estate-partners","tag-th-real-estate","tag-tpg-capital"],"acf":[],"yoast_head":"\nCanadian Fund to Buy Houston REIT in $1.2B Deal - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/canadian-fund-to-buy-houston-reit-in-1-2b-deal\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Canadian Fund to Buy Houston REIT in $1.2B Deal\" \/>\n<meta property=\"og:description\" content=\"CPPIB will be acquiring Parkway Inc., which has a strong local presence, with an office portfolio of about 8.7 million square feet across 19 properties.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/canadian-fund-to-buy-houston-reit-in-1-2b-deal\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2017-07-05T09:40:44+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-08T21:43:56+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2017\/07\/hh.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"534\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Scott Baltic\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/canadian-fund-to-buy-houston-reit-in-1-2b-deal\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/canadian-fund-to-buy-houston-reit-in-1-2b-deal\/\",\"name\":\"Canadian Fund to Buy Houston REIT in $1.2B Deal - 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