September 19, 2012 / 8:15 PM / 7 years ago

Thomas Properties buys out Lehman stake in Austin buildings

NEW YORK (Reuters) - Thomas Properties Group Inc TPGI.O and the California State Teachers’ Retirement System have bought out Lehman Brothers Holdings Inc and another syndication partner in eight Austin, Texas, office buildings to gain full ownership of the properties.

Thomas Properties, a real estate investment trust, on Monday said that its new venture with CalSTRS, called TPG/CalSTRS Austin LLC, paid $859 million for a portfolio of downtown and suburban office buildings and assumed five mortgage loans totaling $626 million. The deal also cut about $200 million of debt on the portfolio by repaying the amount owed to Lehman Commercial Paper Inc.

TPG/CalSTRS Austin LLC, a 50/50 venture in which Thomas is the managing member, bought the 3 million square feet of office properties from TPG-Austin Portfolio Syndication Partners, a venture that included a sovereign wealth fund and TPG/CalSTRS, in addition to Lehman, which had a 50 percent controlling stake.

Los Angeles-based Thomas Properties said it entered into an agreement calling for investor Madison International Realty to buy a one-third interest in the Thomas Properties stake in TPG/CalSTRS Austin LLC.

The portfolio includes five downtown Austin properties - Frost Bank Tower, 300 West 6th Street, One American Center, San Jacinto Center and One Congress Plaza - and three suburban buildings - Westech 360, Park Centre and Great Hills Plaza in Northwest Austin.

Separately, Thomas Properties also owns Four Points Centre in Far Northwest Austin and operates downtown`s 816 Congress and Austin Center for owner Lehman Brothers Holdings Inc.

Shares of Thomas Properties ended regular trading on Wednesday down 14 cents, 2.4 percent, at $5.79.

Reporting By Ilaina Jonas; Editing by Steve Orlofsky

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