Aug. 1 (Bloomberg) -- Hines and New York State Common Retirement Fund said they will invest more than $1 billion in U.S. office and medical buildings amid a recovery in commercial property prices.
The Houston-based real estate firm and the New York pension, the nation’s third-largest plan, formed a joint venture to develop, acquire, own and manage buildings primarily occupied by a single tenant, Hines said today in a statement. The partnership will be funded with $500 million in equity.
Hines and the pension formed a similar venture that developed about 3 million square feet (280,000 square meters) of offices from 1997 to 2004. U.S. commercial property values increased in May for the first time in six months, rising 6.3 percent from April, according to the Moody’s/REAL Commercial Property Price Index.
“The timing is right to reconstitute this venture and strategy,” Hines Chief Executive Officer Jeff Hines said in the statement.
The Moody’s index, which tracks repeat deals including distressed sales, is down 11 percent from a year earlier and 46 percent from the October 2007 peak. Green Street Advisors Inc.’s property-price gauge showed commercial values little changed in June from the previous month and up 20 percent from a year earlier. Prices are down 10 percent from their peak, according to the Newport Beach, California-based research company.
--Editors: Daniel Taub, Christine Maurus
To contact the reporter on this story: Dan Levy in San Francisco at firstname.lastname@example.org
To contact the editor responsible for this story: Kara Wetzel at email@example.com