Global Investment House (Global) announced Wednesday the conclusion of its first Real Estate Acquisition in the United States, as part of its US Real Estate Fund management strategy. Global is currently in the process of screening new investments.
Mr. Sameer A. Al-Gharaballi, Executive Vice President at Global said that the company has gone through extensive analysis on many projects in the United States, which lead to this investment. The portfolio is a collection of two office properties: Corridors I & II and Loudoun Gateway II, which consist of three A Class buildings, totaling 402,674 sq. ft. (37409m²) located in the Chicago and Northern Virginia sub-markets. The total value of the investment is USD72 million, and the fund's share is equivalent to USD16.5 million.
Corridors I and II consists of two, five-story interconnected Class A office buildings located in Downers Grove, Illinois. It contains a total of 299,792 (27851.5m²) square feet on a 17.6 acre site, with average floor plates of 29,979 sq. ft. (2785m²). The buildings each have a five-story atrium within the lobby, which includes terrazzo flooring, mahogany veneer panel walls, and a marble fountain. The buildings also share a fitness center, an indoor/outdoor café, and fully equipped conference rooms in the link connecting both buildings.
Loudoun Gateway II is a four story Class A office building located in Dulles, Virginia. It consists of 102,882 (9558m²) rentable sq. ft. on an 8.14 acre site. The property contains approximately 504 surface parking spaces equating to a parking ratio of 4.9 spaces per 1,000 rentable sq ft. (93m²).
Mr. Al-Gharaballi pointed that the average cash on cash income on the acquisition is approximately 7.2%, distributed monthly.
The real estate industry in the United States is considered to be one of the most dynamic economy tools especially when the companies are expanding and more people are being hired, which in turn raises the demand for real estate. Confidence in the US economic recovery has given a further boost by figures showing strong spending both by consumers and businesses.
He said that Global has capitalized on this great opportunity to benefit from the expected growth in the real estate sector in the US, given that the compounded annual return for real estate in the US has exceeded the inflation rate since 1978. "This is why Global has created this fund to provide income and increase capital in the long run by investing in the US real estate sector," Mr. Al-Gharaballi added.
The fund aims to take advantage of the US real estate market and invest in Medical Office Building “MOB” and Commercial Office Building “COB”.
Knowing that the investment strategy to apply to this type of investment is based on two basic principles: the increase of demand on medical services and the expected cash income.
Mr. Al-Gharaballi concluded by emphasizing that what makes this real estate fund different from other real estate funds is that it is considered a diversified investment tool that doesn't limit its investment to commercial office buildings, but it expands to healthcare buildings".
By having a fund that invests 50% in the commercial building and the other 50% in healthcare buildings, we have then created an investment tool that has never been launched by any other local organization. It also represents an opportunity for the investors to invest in this booming sector in the United States,” he ended.
