REAL ESTATE - The Employees’ Retirement System of Rhode Island (ERSRI) last week ditched direct investment in real estate from its $7.3bn portfolio when it sold the four-story former American Express building in Providence for $20m.
State treasurer Paul Tavares described the sale as “fair and beneficial” to Rhode Island, offering a positive cash flow for the state pension system.
Buyer RI Gateway Properties, a joint venture, offered $2.1m more than ERSRI’s own bid in a bankruptcy court auction. The lead partner in the joint venture, developer Commonwealth Ventures, already owns three other buildings in the area, including the new GTech building.
ERSRI originally bought $23m in bonds that paid for the building’s construction in 1989. Its former owner, Gateway Eight, filed for bankruptcy in 2004 after failing to meet the $21.5m mortgage held by ERSRI. An earlier attempt to sell the building at a bankruptcy court auction last July failed for lack of eligible buyers.
The building, measuring 113,609 square foot, included a 150-space car park. Since January 2006, it has been occupied by Fidelity, which reportedly paid $13.9m upgrading it, under a three-year lease.