{"id":57416,"date":"2025-12-01T18:09:07","date_gmt":"2025-12-01T18:09:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ny\/57416\/"},"modified":"2025-12-01T18:09:07","modified_gmt":"2025-12-01T18:09:07","slug":"cannon-hill-tripost-partner-to-target-distressed-office-opportunities-commercial-observer","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ny\/57416\/","title":{"rendered":"Cannon Hill, TriPost Partner to Target Distressed Office Opportunities \u2013 Commercial Observer"},"content":{"rendered":"

Cannon Hill Capital Partners<\/a> has formed a partnership with TriPost Capital Partners to acquire distressed office properties in New York City, Boston and Washington, D.C., Commercial Observer can first report.\u00a0<\/p>\n

Targeting deal sizes upward of $50 million, the new partnership said it will be able to acquire as much as $1.5 billion in office properties over the next few years via opportunistic real estate investments, non-performing loan purchases and rescue capital.\u00a0<\/p>\n

SEE ALSO: Southern California Mall Owners Rise to Meet Physical Retail\u2019s Evolution<\/a><\/p>\n

Cannon Hill was formed in 2022 by Jeff Gronning, Melissa Donohoe and Eric Rubin, who previously worked together at Normandy Real Estate Partners<\/a> and then Columbia Property Trust<\/a>. The three led a buyout of Columbia Property Trust\u2019s investment management business that included real estate funds and management contracts, including those from Normandy Real Estate Partners.\u00a0<\/p>\n

\u201cNow, we\u2019re turning our attention to growth, and taking advantage of what we think is a compelling investment opportunity and vintage in the market,\u201d Gronning, founder and chief executive officer of Cannon Hill, told CO. \u201cWhat we see today is an increasingly attractive opportunity that still exists in office. Liquidity is returning and values are starting to rise. We\u2019re optimistic that alongside TriPost, we can deploy our expertise to maximize our investments across the East Coast.\u201d\u00a0<\/p>\n

The unison represents Cannon Hill\u2019s first piece of business with TriPost \u2014 led by Brad Carroll and Todd Silverman \u2014 although the two firms\u2019 principals have known each other for more than a decade, Gronning said. TriPost provides growth capital to platforms like Cannon Hill, but hasn\u2019t had an office-focused partner relationship \u2014 until now. And, the new partnership is launching at an opportune time in the market.<\/p>\n

\u201cWe\u2019re still in the early innings, in terms of the opportunity as a whole,\u201d Gronning said. \u201cWe\u2019ve been longtime office investors, but, between 2019 and 2024, Cannon Hill didn\u2019t acquire one office building, and the reason for that was because the opportunity wasn\u2019t there at that point in time. It wasn\u2019t until the second quarter of 2024 that we began investing in the office space again.\u201d\u00a0<\/p>\n

Now, \u201cyou\u2019ve got liquidity returning, the debt markets are opening back up for office, transaction volumes are off the bottom and you\u2019ve got office utilization and leasing volumes in places like New York City that are back to pre-pandemic levels,\u201d Gronning said.\u00a0<\/p>\n

The recovery is uneven, of course, and opportunities vary market by market and even submarket by submarket. But nonetheless, \u201cWe have made that shift, and that gives us confidence and conviction,\u201d Gronning said. \u201cNow is a good time to be transacting in the market again.\u201d\u00a0<\/p>\n

The three markets that the partnership will target \u2014 New York, Boston and Washington, D.C. \u2014 are familiar territory for the Cannon Hill partners.\u00a0<\/p>\n

\u201cAt Normandy, we always had a footprint in the D.C. to Boston corridor and a Northeast focus. It\u2019s also where we have boots on the ground in our vertically integrated platform where we have around 60 people and manage a portfolio currently of about 10 million square feet,\u201d Rubin, Cannon Hill\u2019s CIO, said. \u201cGiven the knowledge and history that comes with that portfolio, it helps us to think about the next opportunities in those markets with real insight.\u201d\u00a0<\/p>\n

From a recovery standpoint, New York is leading the charge relative to D.C. and Boston, Rubin said.<\/p>\n

\u201cI would say D.C., not surprisingly, given the softness in government spending and the headwinds that are facing the D.C. environment, has its challenges. Having said that, we\u2019re seeing some green shoots in the private sector, in particular, with law firms driving some of the activity in the CBD,\u201d Rubin said. \u201cSo, to the extent we can be opportunistic in D.C., and find opportunities to buy assets at significant discounts \u2014 frankly, at land values \u2014 and look at repositioning and redevelopments, those opportunities are extremely compelling to us.\u201d\u00a0<\/p>\n

Moving up the map to Beantown, \u201cI\u2019d say Boston generally lags New York by about a year in terms of some of the activity that we\u2019ve seen,\u201d Rubin added. \u201cOn the tenancy side, there\u2019s been some musical chairs of tenants moving from one building to the other and I think that\u2019s negatively impacted the Boston market, but given the fact that there\u2019s a small group of owners that control the majority of office product there, that changes the dynamics for some of the opportunities, and makes it harder to find those opportunities \u2014 because there aren\u2019t as\u00a0 many assets to select from because of the small nature of the market.\u201d\u00a0<\/p>\n

Cannon Hill already has a head start due to its decades of experience in all three markets, however.\u00a0<\/p>\n

\u201cWe envision ourselves at Cannon Hill as real sharpshooters,\u201d Donohoe, Cannon Hill\u2019s COO, said. \u201cEric mentioned Boston, New York and D.C., which are three large office markets, but we really underwrite the deals that we\u2019re looking at, because we know the markets, we know the neighborhoods, and have a history of investing in those three markets. When we\u2019re looking at maturing office loans, it\u2019s across all all types, from trophy to Class C, and we\u2019re being really specific about what we\u2019re looking at and what we\u2019re underwriting to ultimately make sure that we\u2019re putting together a very high-quality portfolio at the right basis in these markets.\u201d\u00a0<\/p>\n

And there could be plenty of opportunity on the maturing loan front, with $500 billion in loans on offices due to mature by 2028, according to MSCI data.<\/p>\n

While the opportunity is one to be snapped up right now, it\u2019s also one that will play out further over the next two to three years, Donohoe said, and, over that time, Cannon Hill plans on accumulating \u201ca high-quality portfolio of six to eight assets that over a shorter-term hold period will deliver outsized returns to the partnership versus historical periods,\u201d she said.<\/p>\n

When it comes to ideal opportunities for the new partnership, some stand out.\u00a0<\/p>\n

\u201cThere\u2019s several legs to the stool, but certainly distress is one theme that we\u2019re trying to invest into,\u201d Gronning said. \u201cWe\u2019re in some way agnostic as to whether it\u2019s an overleveraged or undercapitalized property where, for example, a borrower is underwater, isn\u2019t going to delever and is cooperating with the lender to offer it to the market in a short sale. There\u2019s a lot of that going on today, and we\u2019re actually bidding on one as we speak.\u201d\u00a0<\/p>\n

The other side of the coin is non-performing loans (NPLs), where banks are looking to liquidate notes. \u201cThat\u2019s akin to what we saw coming out of the Global Financial Crisis (GFC), when we bought a lot of NPLs, and did loans-to-own and took over the equity during that period,\u201d Gronning said. \u201cFor us, the goal is to ultimately control the real estate and leverage our operating platform to create value.\u201d\u00a0<\/p>\n

As Cannon Hill takes its first steps in its TriPost partnership, it\u2019s already made headlines investing with partners TPG and Global Holdings at properties such as 101 Franklin Street <\/a>and 888 Broadway<\/a>.<\/p>\n

And, it\u2019s only the beginning.\u00a0<\/p>\n

\u201cOffice is part of our DNA,\u201d Gronning said. \u201cIt\u2019s our history. In the 35 years that I\u2019ve been in this business, the highest returns we\u2019ve delivered to our investors were coming out of the GFC in the office space. I\u2019m not saying that this is exactly the same environment today, because there are differences, obviously. But, we feel like this vintage should be a very good one, and it\u2019s why we\u2019re very excited to be moving forward.\u201d\u00a0<\/p>\n

\u201cWe are pleased to partner with Cannon Hill,\u201d Evan Cohen, managing director at TriPost, said. \u201cTheir years of focused experience in the office sector provide a significant advantage to effectively capitalize on compelling opportunities emerging in the space.\u201d<\/p>\n

Cathy Cunningham can be reached at ccunningham@commercialobserver.com<\/a>.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"Cannon Hill Capital Partners has formed a partnership with TriPost Capital Partners to acquire distressed office properties in…\n","protected":false},"author":2,"featured_media":57417,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[3624,31025,31024,31026,75,84,83,31027,9,24,63],"class_list":{"0":"post-57416","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-manhattan","8":"tag-channel","9":"tag-evan-cohen","10":"tag-investments-sales-eric-rubin","11":"tag-jeff-gronning","12":"tag-manhattan","13":"tag-manhattan-headlines","14":"tag-manhattan-news","15":"tag-melissa-donohoe","16":"tag-new-york","17":"tag-new-york-city","18":"tag-nyc"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/57416","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=57416"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/57416\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/57417"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=57416"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=57416"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=57416"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}