Local firm Allegiancy recently took over management of the 121 Centre office park in Bedford, Texas. Photo courtesy of Allegiancy.
With a $30 million capital raise on deck, a local real estate firm pulled the trigger last week on a deal that doubles the size of its management portfolio and expands its presence into Texas, the West Coast and elsewhere.
Allegiancy, a commercial real estate asset management firm headquartered on Midlothian Turnpike, acquired Houston-based TriStone Realty Management for an undisclosed sum on June 1. Allegiancy CEO Steve Sadler said it was a multimillion-dollar deal.
It marks Allegiancy’s first acquisition of another firm since it raised $5 million in capital from investors last year. Sadler said there are likely more deals to come.
“Allegiancy’s strategy when we raised (the first round of) capital was to do exactly this: take quality operators and bring them in as affiliates,” Sadler said. “It was an opportunity to execute on our strategy, expand our asset base and grow our geographic presence.”
Allegiancy describes itself as a business manager for leasable commercial real estate, meaning it oversees property management, leasing, construction, financing and other day-to-day operations of a building for the property’s owner.
Steve Sadler
The TriStone deal added about $450 million worth of real estate to Allegiancy’s portfolio, Sadler said. The combined companies now have management contracts for 65 properties with a total size of about 7 million square feet and a value of just less than $1 billion.
The combined portfolios consist largely of Class-A office buildings from Pennsylvania down through Florida and added TriStone’s assets in markets in Texas, California, Oklahoma, Illinois and Utah.
About 20 percent of the company’s asset value comes from properties owned through REVA Cos., a set of sister companies headed by Sadler and his brother Chris that includes a real estate investment banking arm and a REIT they hope to take public in the next few years.
TriStone will add about $2.5 million in revenue to Allegiancy’s balance sheet, bringing its annual earnings to about $3 million, Sadler said.
Next on Allegiancy’s plate is a plan to raise up to $30 million through a stock offering, capitalizing on recently changed federal rules.
The new Regulation A+ rules, as finally approved in recent months by the Securities and Exchange Commission, allow privately held companies to raise up to $50 million from investors in a single offering. The cap prior to the rule change was $5 million. Companies are now also able to accept money from regular investors; such offerings had previously been open to only accredited investors. And companies are also now able to open their offerings in every state without having to get permission from each state beforehand.
Sadler said Allegiancy is working with investment banking firm Moloney Securities to get the offering documents filed with the SEC in the hopes of accepting money from investors beginning in September.
It would then look to deploy the $30 million in new capital over 12 to 18 months.
Local firm Allegiancy recently took over management of the 121 Centre office park in Bedford, Texas. Photo courtesy of Allegiancy.
With a $30 million capital raise on deck, a local real estate firm pulled the trigger last week on a deal that doubles the size of its management portfolio and expands its presence into Texas, the West Coast and elsewhere.
Allegiancy, a commercial real estate asset management firm headquartered on Midlothian Turnpike, acquired Houston-based TriStone Realty Management for an undisclosed sum on June 1. Allegiancy CEO Steve Sadler said it was a multimillion-dollar deal.
It marks Allegiancy’s first acquisition of another firm since it raised $5 million in capital from investors last year. Sadler said there are likely more deals to come.
“Allegiancy’s strategy when we raised (the first round of) capital was to do exactly this: take quality operators and bring them in as affiliates,” Sadler said. “It was an opportunity to execute on our strategy, expand our asset base and grow our geographic presence.”
Allegiancy describes itself as a business manager for leasable commercial real estate, meaning it oversees property management, leasing, construction, financing and other day-to-day operations of a building for the property’s owner.
Steve Sadler
The TriStone deal added about $450 million worth of real estate to Allegiancy’s portfolio, Sadler said. The combined companies now have management contracts for 65 properties with a total size of about 7 million square feet and a value of just less than $1 billion.
The combined portfolios consist largely of Class-A office buildings from Pennsylvania down through Florida and added TriStone’s assets in markets in Texas, California, Oklahoma, Illinois and Utah.
About 20 percent of the company’s asset value comes from properties owned through REVA Cos., a set of sister companies headed by Sadler and his brother Chris that includes a real estate investment banking arm and a REIT they hope to take public in the next few years.
TriStone will add about $2.5 million in revenue to Allegiancy’s balance sheet, bringing its annual earnings to about $3 million, Sadler said.
Next on Allegiancy’s plate is a plan to raise up to $30 million through a stock offering, capitalizing on recently changed federal rules.
The new Regulation A+ rules, as finally approved in recent months by the Securities and Exchange Commission, allow privately held companies to raise up to $50 million from investors in a single offering. The cap prior to the rule change was $5 million. Companies are now also able to accept money from regular investors; such offerings had previously been open to only accredited investors. And companies are also now able to open their offerings in every state without having to get permission from each state beforehand.
Sadler said Allegiancy is working with investment banking firm Moloney Securities to get the offering documents filed with the SEC in the hopes of accepting money from investors beginning in September.
It would then look to deploy the $30 million in new capital over 12 to 18 months.