TPG continues leveraging distressed realty concerns

Northern, WI 03/10/2013 (avauncer) –TPG Capital, earlier Texas Pacific Group which mainly deals in private equity investments, forayed into real estate sector two years back. The firm, which was started by David Bonderman and James Coulter in 1992, has pumped in more than $2 billion in form of equity purchase of properties such as California malls, Florida apartments and several office spaces in the US and the UK.

TPG has chosen a different path to invest in realty space and instead of creating an out-and-out property fund like its several rivals, it has opted to buy properties in cash from its buyout fund and realty firms across the US and outside.

“They’re looking at the real estate world differently than just buying a building, fixing it up and selling it. That really appealed to us,” stated director of New Jersey’s Division of Investment Timothy Walsh.

TPG Capital is investing in both the residential and commercial properties. TPG is mulling over buying Assisted Living Concepts, operating a chain of residential projects. In collaboration with DivcoWest, a realty investor based in San Francisco, TPG finalized in December last year a deal to buy properties from Mission West Properties Inc, based in Silicon Valley.

Other latest purchases include the $200 million deal with Parkway Properties in June 2013, and the acquisition of London’s Wool gate Exchange office building worth $398 million last month. TPG bought the property in London by streamlining a loan held by Irish Banking Resolution Corp.

“Our investment results with TPG have been terrific,” president of global investments, Ivanhoe Cambridge, Bill Tresham wrote in an e-mail. “We always found that their underwriting was exceptional. They are a solid team of highly skilled professionals.”

TPG Capital in a joint venture with Patron Capital purchased more than 200 official buildings and commercial properties last August from Uni-Invest Holding NV, which defaulted on 600 million-euro debt.

It unlike rivals Blackstone, KKR & Co. and Carlyle Group LP has not become public and is not keen to list its realty wing as a separate investment firm. TPG Capital has finalized more than 10 property deals since 2011. TPG invested $505 million to have non-industrial properties in its kitty.

Kelvin Davis, an old TPG partner who looks after North American deals, has been managing company’s real estate investments. Davis has a long exposure in property dealings; and before joining TPG, he was working with Tom Barrack’s Colony Capital LLC. TPG went on to hire Avi Banyasz of Westbrook Partners and also brought on board Adam Metz, ex-chief executive officer of General Growth Properties, as a senior adviser.