Cornerstone in £90m off-market City play

The US investor has agreed to buy 40 Gracechurch Street, EC3, from Arab Investments in an entirely off-market deal.

The prime 122,000 sq ft office and retail development is 44% let, with I2 – the largest tenant occupying 30,000 sq ft - and the University Partnership Programme occupying the part-ground, first and second floors of the office space, and The Folly bar occupying the retail space. Floors 3-7 are currently vacant.

Arab Investments acquired the building at 36-41 Gracechurch Street in 2006 from Quintain for around £25m. At the time of the acquisition, the property had consent for a scheme of 120,000 sq ft, which would retain a listed facade.

Hartford, Connecticut-based Cornerstone is an indirect subsidiary of the Massachusetts Mutual Life Insurance Company, and has been actively seeking investment opportunities in London this year.

Founded in 1994 to manage MassMutual’s equity real estate investments, Cornerstone has become one of the world’s largest real estate advisers. Including the operations of its global network of subsidiary companies, Cornerstone offers its investment services through open and closed end private funds, separate accounts, co-investment programs, joint ventures, and mutual funds.

In early 2010, Babson Capital Management, an affiliated company, transferred its Real Estate Finance Group to Cornerstone, meaning Cornerstone can now offer a full array of real estate debt products and services. Also in the first quarter of 2010, Cornerstone acquired Protego Real Estate Investors, a privately held, UK-based real estate advisory firm.

Savills and Hanlon Bennett Consulting are believed to be advsing Arab Investments.

All parties declined to comment.


Source: James Buckley, CoStar News