KAMCO acquires GE Global Operation Center in US
KAMCO Investment Company, a leading investment company with one of the largest AUMs in the GCC region, successfully acquired General Electric’s (GE) Global Operation Center building located in the United States of America. KAMCO, established in the heart of Kuwait City with an international office in the UAE, announced that the 12-story office tower housing GE’s Global Operation Center, located within The Banks “Work, Live, Play” mixed-use development area in downtown Cincinnati, Ohio is categorized as a Class A trophy property.
The strategic location provides returns expected to deliver a 6.5% per annum net yield to investors and a projected net IRR of 7.1% after a total investment period of 5 years. The newly built-to-suit state of the art facility is equipped with the latest building techniques and necessary infrastructure to accommodate a large number of offices, and consists of 339,678 sq feet of usable commercial space. The property, leased to GE on a triple net 15year lease, started from October 2016 until 2031 with five additional terms of 5 years with each option extended.
Commenting on the acquisition, Chief Executive Officer of KAMCO, Faisal Mansour Sarkhou, said that the acquisition was yet another landmark in KAMCO’s expansion plan that the Firm implemented during the beginning of 2016. He also affirmed KAMCO’s strategic focus on the regional and international real estate investments across the identified core markets that provide sustainable returns to the Firm’s shareholders.
Also commenting on the acquisition, Chief Investment Officer of KAMCO, Khaled Fouad, said, “This investment opportunity emphasizes KAMCO’s ongoing determination in providing new diverse and innovative income generating asset streams, and we believe that this prime asset offers long-term value in combination with attractive current yields.” Fouad also added that the Alternative Investments Department at KAMCO is keen to resume developing and expanding its renowned track-record of experience in different alternative asset classes on a local, regional and global basis.
The investment transaction was orchestrated by the Atlanta office of Eastdil Secured, acting on behalf of Carter and 90 North Real Estate Partners acting on behalf of KAMCO. JLL Capital Markets Debt & Equity team, based in Chicago, coordinated the financing, on behalf of KAMCO, with Des Moines, Iowa based Principal Real Estate Investors. The local Cincinnati office of CBRE, led by Steven Thornton, will provide property management on the asset.
Assisting KAMCO in completing the transaction, Ice Miller LLP acted as legal advisors for all practices in the United States.. Ernest and young provided tax advisory services for the acquisition, while BDO USA LLP, Centrum Investment Group, and Jones Lang LaSalle financial and professional services firm specializing in commercial real estate services, assisted in completing the transaction. GE is a global digital industrial company that is ranked 8th in the Fortune 500 with investment grade ratings from Standard and Poor’s (AA+) and Moody’s (A1). The company’s diversified stream of income from its clients in over 180 countries has led GE to reach a market cap of approximately USD 296.5 billion.
Strategic Location
The real estate property acquired by KAMCO is located in the vital area of Cincinnati, Ohio called “The Banks”. The Banks is vibrant, mixed-use development on the banks of the Ohio River. The ideal location consists a combination of residential real estate, entertainment venues, retail stores, offices and national parks. It is also situated between the Cincinnati Reds’ baseball stadium, the Great American Ball Park and the Paul Brown Stadium. The development has also transformed downtown Cincinnati’s riverfront to a true live-work-play environment.
When fully completed, The Banks will feature 1,800 residential units, 400 hotel rooms, 1 million square feet of office space and 400,000 square feet of retail space. The 592 residential units have been completed to date, along with over 100,000 square feet of retail. The location has multiple bus and shuttle services and a new bike-sharing program, Cincy Red Bike, with recently installed stations across the downtown Cincinnati area providing over 260 bicycles for public use. The new $112 million, 3.6-mile streetcar track will link The Banks to Downtown and eventually to the University of Cincinnati. The amenities The Banks has to offer allows GE to access a broader and wider pool of quality staff, in a modern working environment while encouraging a work- life balance.