Crescent brings in partners

Crescent brings in partners

Byline: Donna Block

Fort Worth-based Crescent Real Estate Equities Co. said Monday, Nov. 8, that it has entered a series of joint venture transactions valued at $1.2 billion and involving five of its landmark office properties.

The two-phase process begins with a joint venture involving the sale of stakes in three Texas properties: The Crescent, Houston Center and Post Oak Central. J.P. Morgan Investment Management Inc. will hold a 60% interest in the properties valued at $898.5 million. Crescent will hold the remaining 40% interest, Crescent said in a statement.

The Crescent is in Dallas; Houston Center and Post Oak Central are in Houston.

Crescent is also negotiating with an unidentified institutional partner to cut its 40% interest in the joint venture to a 24% stake. The company expects to finalize negotiations by year’s end.

As part of the second phase, Crescent plans to sell a 76% stake in two properties — Trammell Crow Center in Dallas and Fountain Place in Houston, which are valued at $320.5 million — to J.P. Morgan. Crescent would retain the remaining 24% interest.

If all goes according to plan, Phase 2 will generate $316 million in net cash proceeds and a gain in the fourth quarter of $211 million on the sale of the combined 76% interest.

Separately, Crescent said it plans in the fourth quarter to generate a gain of about $8.9 million and net proceeds of about $22.9 million from a Houston land sale.

“One of our key strategic goals was to more than double the size of our previous joint venture portfolio by the end of 2005,” Crescent president Denny Alberts said in a statement. “We are ahead of schedule in doing just that.”

Lehman Brothers Inc. advised Crescent on both deals.

COMPANY: Crescent Real Estate Equities Co.

COMPANY: J.P. Morgan Investment Management Inc.

COMPANY: Lehman Brothers Inc.

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