REPE Fund Profile Series - Part Nine: BentallGreenOak
Here, each of our Fund Profiles briefly summarizes each fund’s history, as well as examining the details of the funds themselves. And we also outline a few of each firm’s key real estate equity investments in recent years to help you prepare for your upcoming REPE technical interview(s).
Following on from Part Eight of the series focused on the Rockpoint Group, today’s post will take a closer look at BentallGreenOak.
Key facts about BentallGreenOak
The BentallGreenOak group of companies was formed in 2019 after the North American real estate asset management arm of Sun Life Financial Inc (at the time), Bentall Kennedy, purchased a majority stake in GreenOak Real Estate from the Tetragon Financial Group. After the deal closed, BentallGreenOak became part of SLC Management, Sun Life’s newly formed asset management business.
Prior to its acquisition, GreenOak (founded in 2010) had grown its operations to 10 countries with over 100 employees with around $11B worth of real estate equity assets under management, primarily in the European and Asian markets. As Bentall Kennedy’s asset portfolio at the time was heavily focused in the North American market, GreenOak was an attractive complementary acquisition.
At the time of the acquisition, the Sun Life Financial group held a combined total of $773B (CAD$984B) worth of third-party assets under management, with its former Investment Management group (that included the Bentall Kennedy entity) holding $48B (CAD$61B) of this—or, approximately 6.2% of Sun Life’s total holdings.
The deal (resulting in a $940M valuation for the combined company) was orchestrated by one of GreenOak’s co-founders, Sonny Kalsi, and Bentall Kennedy’s U.S. president and CIO, Amy Price—the two used to be co-workers at Morgan Stanley. Both Amy and Sonny, along with Sonny’s GreenOak co-founder, John Carrafiell, continue to lead the company as President and co-CEOs, respectively.
Today, BentallGreenOak’s headquarters are planted squarely in its parent company’s Sun Life Centre in Toronto, Canada. Domestically, the firm has 14 offices in North America: with 7 across Canada (including its HQ) and a further 7 in the U.S., in hubs such as New York, Seattle, Boston, and Washington D.C. Outside of North America, the company also has offices in strategic locations in both Asia and Europe.
Overall, the firm has a team of over 1,300 staff spread across 24 offices in 12 countries.
Aside from its investment business, BGO also has a residential property management and leasing company, BentallGreenOak Residential, focused on a portfolio of over 400 high-quality rental properties across Canada.
BentallGreenOak’s Real Estate Equity Investment Strategies
As of the end of Q3 2021, BentallGreenOak has around $70B worth of assets under management, comprising around 60,000,000 square feet of real estate assets (that’s roughly around the size of Washington D.C.!)
BentallGreenOak’s global real estate investment portfolio spans across all major asset classes including mortgage debt assets, retail developments, industrial and logistics assets, office properties, multifamily units, and hospitality and leisure properties, besides niche investments in other sectors such as senior retirement housing.
The firm’s global investment strategy relies on using several established investment approaches across its funds—namely the Core, Core Plus, Value-Add, and Debt strategies. We've outlined each of these below:
Core
Here, BentallGreenOak’s funds focus on investing in balanced and well-located assets of good quality, with the aim to generate and maintain stable income in the long-term—check out the White Oak deal in the section below, for an example of this strategy in play.
Core Plus
With this approach, the firm looks for high-growth opportunities balanced with steady income—for example, with its specialist office real estate fund in London (see the WELPUT project in the section below).
Value-Add
BentallGreenOak uses this strategy to look for opportunities to purchase inefficient assets with the potential to create additional streams of revenue. For an example of this in action, see the 285 Madison Avenue deal in the section below.
Debt
This strategy encompasses BentallGreenOak’s credit and debt business. Here, the firm manages real estate loans and debt asset management in-house, primarily in the Europe market.
Outside of these strategies, BentallGreenOak also invests in various securities (including secondaries and co-investments) through its BGO Strategic Capital Partners business, allowing its investors the flexibility to increase the liquidity of their portfolio holdings.
Some of BentallGreenOak’s Notable Deals and Projects
We always recommend that you take the time to examine a real estate private equity firm’s deals, looking at both challenges and successes, to get a better understanding of why the firm invests in the way it does.
So we’ve listed some of the firm’s notable deals below to get you started:
The WELPUT fund
In 2001, BentallGreenOak (then under the banner of Grafton Advisors in the UK) created the West End of London Property Unit Trust (WELPUT), an unlisted fund specializing in the acquisition, management, and sale of office developments in Central London.
Today, the fund has GBP£1.2B (around $1.56B) worth of assets under management—comprising 2,800,000 square feet of leased office space, and including properties such as:
- 7 Bishopsgate: acquired from clients of TH Real Estate in 2015 for £48.9M (around $64.8M), including 3 floors and 21,960 square feet of luxury office space with a roof terrace in the heart of London’s financial district.
- 101 New Cavendish Street: bought from the Greycoat Central London Office Development Fund for £86.5M (around $114.6M) in 2014, including 4 floors and 45,325 square feet of high-end office space in the heart of London’s media district.
- Regent’s Wharf: acquired from TIAA Henderson for £50M (around $66.2) in 2014, including 111,000 square feet of planned mixed-use space across 4 buildings.
285 Madison Avenue
In 2012, GreenOak joined forces with RFR Holdings to purchase a vacant 26-story, 530,000 square foot office building at 285 Madison Avenue in Midtown, New York City for $190M. The “haunted” office building was the site of a gruesome freak elevator accident the previous year.
Undeterred, the partners invested further capital—to the tune of tens of millions of dollars—to transform and renovate the property. In 2016, RFR then paid GreenOak $334.1M to buy out the firm’s remaining 85% stake.
Joint Venture with White Oak Partners
In 2021, BentallGreenOak announced its partnership with White Oak Partners, a multifamily housing investment company, to acquire, renovate, and lease over $1B worth of multifamily assets across the U.S. under its core and core plus strategies.
Initially, the firm committed $400M to recapitalize two of White Oak’s existing multifamily assets, with a further two acquisitions already under contract.
Anything Newsworthy?
As of November 2021, BentallGreenOak announced its commitment to join the Net Zero Asset Managers initiative, joining other real estate private equity investment firms like Brookfield and Blackstone (along with its parent company, Sun Life) in pledging to achieve Net Zero greenhouse gas emissions across its entire commercial real estate investment portfolio by 2050.
Now back to you...
We hope you found this BentallGreenOak fund profile helpful for your REPE technical interview preparations. Now that you have the theory in place: do you have the right strategy to sell yourself well at your interview, both technically and behaviorally?
Let us help you set yourself up for your new career in real estate private equity firms: check out how we can support your career goals at Leveraged Breakdowns.
About the Author:
Melody Sadé Abeni is a London-based writer who specialises in commercial real estate content. As a generalist member of the Leveraged Breakdowns team, she crafts detailed posts geared towards those curious about the real estate private equity life.
In her former professional life, Melody supported senior corporate executives as a global mobility consultant and did her time in both management consulting and specialist asset management firms.
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