Vario Equity and Compass Properties has acquired two office buildings located in Madison, Wisconsin’s American Center Business Park from American Family Insurance. The purchase price was about $19 million.
MADISON, Wis., June 11, 2019 /PRNewswire/ — Wisconsin-based companies Compass Properties and Vario Equity announced the purchase of two Class A office buildings located in Madison’s American Center Business Park. The 4600 American Parkway and 5133 West Terrace buildings were purchased from American Family Insurance for approximately $19 million, according to Compass Properties President Tyler Noel.
Vario Equity, a recently formed, Madison-based private equity firm that invests in Wisconsin-based real estate assets is the lessor of the properties. Compass Properties will provide property management and development services.
“This was a great opportunity to acquire two properties that provide Class A office space inventory in one of Madison’s premier office parks,” said Eric Heiting, Vario Equity’s managing director. “The Madison office market continues to be very strong, with some of the lowest vacancy rates in the Midwest. Current and future commercial real estate development on Madison’s far east side — including UW Health’s plans to build a $255 million clinic near the hospital it opened three years ago — will drive office space demand well into the future.”
The American Center Business Park is located on 447 acres near the intersection of Interstate Highway 90/94/39 and U.S. Highway 151. The park was developed with an eye toward protecting and preserving natural habitats and includes a mix of open space, ponds, wooded hills and more than three miles of biking and walking trails.
Noel said the properties were bought “off market” and a key part of the deal structure was the property management component. “American Family wanted to make sure its employees and other tenants in the two buildings would continue to get outstanding maintenance and other property management services,” he said. “They knew of our reputation for superior tenant service and our commitment to sustainability.”
American Family Insurance recently completed an extensive capital improvement that updated the common areas of the buildings and upgraded many of the buildings’ amenities. Noel said that Compass Properties will implement sustainable building management practices that reduce waste, encourage healthy lifestyles, and conserve energy.