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Lovell Minnick clinches first real estate deal with CenterSquare

With its buy of CenterSquare Investment Management, Lovell Minnick Partners has struck its first real estate deal.

Lovell Minnick said Sept. 20 it agreed to buy a majority of CenterSquare from BNY Mellon Investment Management. Financial terms weren’t announced. CenterSquare management, led by CEO Todd Briddell, will also have a stake. The transaction is expected to close by year end.

Founded in 1987, CenterSquare, of Plymouth Meeting, Pennsylvania, invests in publicly traded REITS, private equity REITS, and listed infrastructure for institutional investors like pension funds and endowments. CenterSquare, a real estate investment manager, has about $9 billion in assets under management. It employs about 70 people.

Briddell, who is staying on as CenterSquare’s CEO, said 100 percent of management is buying into the transaction. No layoffs or staff reductions are expected, he said. “We’re excited to bring everyone along,” Briddell said.

Lovell Minnick has been interested in the real estate space for some time, said James Minnick, co-chairman. “We’ve been looking for an opportunity to invest in a real estate investment manager. We’re all excited about [the deal],” he said.

Lovell Minnick is known as a financially focused PE firm; much of its experience is in asset management. In fact, CenterSquare will become Lovell’s 22nd asset manager once the transaction closes. The PE firm considers CenterSquare an asset manager “with a specialty in real estate,” said Jason Barg, a Lovell principal.

Talks between the firms began last year, executives said. The deal was not the result of an auction process. Instead, CenterSquare management was looking for an investor to help them buy the business, Minnick said. “The timing was good for all of us,” he said.

It’s not clear how much Lovell invested. The PE firm typically provides $20 million to $100 million equity per deal. CenterSquare is Lovell’s sixth platform deal for Fund IV. The firm will be looking to add to the company through acquisitions, Barg said.

Over half of Lovell Fund IV, which collected $750 million in 2015, has been invested, Minnick said. “As we continue to invest Fund IV, we’ll be looking for the right timing and the right steps for Fund V,” he said.

R. Bruce Cameron and Brendan Kelly of Berkshire Capital advised CenterSquare.

BNY Mellon could not be reached for comment.

Action Item: To contact James Minnick call him at (610) 995-9660

Photo of the Melbourne suburbs courtesy of Ingrid_Hendriksen/iStock/Getty Images