Cannon Hill Capital Partners and TriPost Capital Partners form strategic partnership

 

 

 

Manhattan, NY Cannon Hill Capital Partners, a vertically-integrated real estate firm, has entered into a strategic partnership with TriPost Capital Partners. The capital investment will allow Cannon Hill to scale its acquisition activities in New York City, Boston and Washington, D.C., with a focus on distressed office properties. The partnership will enable the acquisition of up to $1.5 billion in strategic office assets over the next three years.

“We see the current vintage for new office investments to be highly attractive,” said Jeff Gronning, co-founder and CEO of Cannon Hill. “After a steep market decline, liquidity is returning to the office sector, and values are rising again. We’re optimistic that alongside TriPost, we can deploy our expertise and capital into our growing pipeline of compelling investment opportunities.”

“We are pleased to partner with Cannon Hill. Their years of focused experience in the office sector provide a significant advantage to effectively capitalize on compelling opportunities emerging in the space,” said Evan Cohen, managing director at TriPost.

The partnership, which was initially seeded with an investment in Midtown South Manhattan, will primarily aim to target the acquisition of direct real estate and non-performing loans backed by high-quality, income-producing properties, in tandem with third-party joint venture investors. It will also seek to provide “rescue capital” to owners in select situations and pursue opportunities for office redevelopment or conversion, all with the goal of utilizing Cannon Hill’s best-in-class management capabilities to drive value to a portfolio acquired at a significant discount to replacement cost and prior peak pricing. 

“There is a significant wave of maturing loans on office properties coming due over the next three to four years, many of which are over-leveraged or undercapitalized and will struggle to refinance. This presents an excellent source of deal flow for what we’re trying to accomplish,” Gronning said, highlighting the more than $500 billion in debt on commercial office that is scheduled to mature by 2028, according to data from MSCI, Inc. “The office sector in our markets is also recovering and displaying strong fundamentals, creating an opportune time to transact.” 

In addition to TriPost, Cannon Hill has brought its investment strategy and acumen to the market through recent joint venture partnerships with TPG and Global Holdings, among others. Cannon Hill partnered with TPG on 101 Franklin St., an ongoing office-to-residential conversion project in Tribeca, and it partnered with Global Holdings on 888 Bdwy., a stabilized, recapitalized office asset in Midtown South. Cannon Hill has a number of notable properties and projects within its 10 million s/f portfolio, including an active office-to-industrial redevelopment outside of Washington, D.C. in Springfield, Va.

Cannon Hill was founded in 2022 by former executives of Normandy Real Estate Partners and Columbia Property Trust, Jeff Gronning, Eric Rubin and Melissa Donohoe, who boast a 20-plus-year track record of owning and managing commercial property assets in major U.S. real estate markets, including through prior periods of market dislocation or distress.