Hong Kong's Gemini Investments plans to dispose of a trio of buildings in one of the hottest commercial property markets in the United States as it sets its sights on the coasts.
The firm's U.S. fund that operates as Gemini-Rosemont Realty agreed to sell its office portfolio in Nashville, Tennessee, as part of its strategy to shift its U.S. investment activity to coastal markets. OakPoint Capital Partners has contracted to buy the properties and agreed to pay $41.5 million, or about $109 a square foot, for the portfolio, according to a Gemini filing with the Hong Kong Stock Exchange.
The move comes after Nashville in October was declared the best overall U.S. market for real estate investors heading into 2023 in the "Emerging Trends in Real Estate" report from research and policy organization Urban Land Institute and PwC. It marked the second year in a row Nashville topped the list.
The properties OakPoint has agreed to buy are located at 15, 22, and 25 Century Blvd. The portfolio contains a total of 382,164 square feet in two six-story office buildings and one five-story office building and parking spaces.
Los Angeles-based investment firm Gemini-Rosemont's move comes just days after it purchased Peninsula Life Science Center in Burlingame, California, for approximately $59.4 million as part of its move to coastal markets. The transaction marks the company’s first biotech property purchase.
Gemini-Rosemont’s “strategic operating plan is to focus on coastal gateway, technology-driven and selected markets that exhibit compelling fundamentals, high liquidity and improving demographics, which are mostly in the West Coast and the East Coast of the U.S., while at the same time gradually dispose of assets located in non-focused markets at suitable timing, which are mostly located in the Central U.S.,” Gemini stated in its filing.
The office portfolio Gemini-Rosemont sold in Nashville has a vacancy rate of 17.6%. The average sale price over the past 12 months in what CoStar calls the "Office - Airport North" market where the properties are located is $190 per square foot, according to CoStar data.
A lease with Amerigroup Tennessee was not renewed last March with tenant set to reduce its space from 82,062 square feet to 31,224 square feet, according to CoStar loan data. The three buildings are subject to a commercial mortgage-backed securities loan with an outstanding balance of $25.7 million scheduled to mature in January.