SOURCE: Equastone

December 27, 2006 11:35 ET

Equastone Announces First Acquisition in New Orleans

First Private Equity Firm to Invest Post-Katrina in Class A High Rise Office Building

SAN DIEGO, CA -- (MARKET WIRE) -- December 27, 2006 -- Equastone, a San Diego, Calif.-based real estate investment firm, today announced the acquisition of Pan-American Life Center located at 601 Poydras Street in New Orleans, La. The 28-story Pan-American Life building is a 684,027 square foot Class A office complex with an eight-story parking garage in the Central Business District (CBD) of New Orleans.

A landmark deal, the Pan-American Life Center is the first acquisition in Louisiana for Equastone and the first institutional quality, high rise office building to attract private equity investors -- post-Katrina -- from outside the New Orleans area.

"The Pan-American Life Center is considered one of the finest Class A commercial locations in the heart of New Orleans. It was the first Class A office building in the CBD to re-open its doors after Katrina and received only minimal damage from the hurricane. In addition to prime office space, the complex includes a full service cafeteria, the high-tech Pan-American Life Conference and Media Center and a 795-vehicle public parking garage, and is connected to the InterContinental Hotel.

At acquisition, Pan-American Life Center was 75 percent occupied. Evan Stone of Jones Lang LaSalle represented the seller in the transaction. Greg Riera of Jones Lang LaSalle has been awarded the leasing assignment. Ashton Page, also of Jones Lang LaSalle, will provide property management services.

"The combined loss of approximately 1.5 million square feel of Class A and B office space in the CBD in the past year has significantly tightened occupancy," said Equastone Chairman David Bourne. "We firmly believe New Orleans is poised for a strong revival and this acquisition is in line with our strategy of acquiring and adding value to underperforming buildings in recovery and growth markets."

The New Orleans office market has shown significant signs of recovery through the first half of 2006. Occupancy in the Class A CBD submarket has jumped to 91 percent. Rental rates have risen by four percent to an average of $16.38 per square foot in the past year.

In addition to the company's standard due diligence, Equastone's CEO Chad Carpenter met with all the key players involved in New Orleans' recovery including Mayor Ray Nagin, Governor Kathleen Blanco, Senator Mary Landrieu and United States Secretary of Commerce Carlos Gutierrez to review the New Orleans recovery plans in detail. Carpenter states, "All of these politicians are committed to the recovery of New Orleans. There is no doubt in my mind that New Orleans will be rebuilt and will be a better city than it was."

Carpenter also met with John Kelly, Chairman of Pan-American Life and Chairman of the Louisiana 100. "Mr. Kelly has been a great spokesman and champion for New Orleans and was extremely helpful educating us on New Orleans and its recovery. I can't say enough about him and what an asset he is to the people of New Orleans," said Carpenter.

Pan-American Life President and CEO, Jose Suquet said, "We were very impressed with the Equastone team and their ability to perform. We are proud that the building will continue to have our name and as part of our commitment to New Orleans, to remain in the Pan-American Life Center as the largest tenant in the building." Suquet pointed out that, for Pan-American Life, the decision to sell was essentially a decision to restructure the company's balance sheet, making an already financially strong insurance company even stronger. The move also fits in with the company's continuing strategy of focusing exclusively on its core business. The decision was unanimously supported by Pan-American's Board of Directors.

About Equastone

Equastone is a real estate investment firm that buys, fixes, leases and sells underperforming commercial real estate in growth and recovery markets across the U.S. Equastone manages investment capital on behalf of Equastone Real Estate Funds, which are private equity funds for high net worth and institutional investors seeking a direct investment in "value-add" commercial real estate.

The firm intends to acquire $1 billion in office and flex properties over the next two years and is seeking investment opportunities in new and existing markets including Texas, California, Arizona, Colorado, Louisiana, Oregon, Washington, Utah and New Mexico. Investment offerings should be directed to John Locke at jlocke@equastone.com and Chris Stai at cstai@equastone.com.

Equastone and its affiliates currently have offices in San Diego, Denver, and Houston. Equastone currently owns and operates properties in California, Arizona, Colorado, Nevada, Texas and Louisiana.

For more information about Equastone and Equastone Real Estate Funds, call Mykel Sprinkles at 858-812-3261 or visit www.equastone.com.

About Pan-American Life Insurance Company

New Orleans-based Pan-American Life has been a leading international insurance company for more than 90 years. Founded in 1911, Pan-American employs more than 800 worldwide, providing its top-rated life and health insurance, worksite benefits and financial planning products in 43 states, the District of Columbia (DC) and Puerto Rico. Its international operations, offering life and group health insurance throughout Latin America, includes affiliates in Panama, Guatemala and Colombia, and branch offices in Ecuador, El Salvador and Honduras.

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