Court Orders HUD to Pay $8.8 Million

Let’s get the true story regarding HUD and Energy Capital Partners out to the public as well. 

For years the negative reporting done in response to Energy Capital Partners contract with HUD has been slanted with an extremely one sided version seemingly used as a political weapon against President Bill Clinton.  The Article “The Presidents Secret Money Machine”  published by the online magazine The Daily Republican through Web Portal Inc. stands as an archive for the contract between Fred Seigel of Energy Capital Partners and HUD. 

Some background on The Daily Republican;  they are brought to us by Web Portal Inc a castaway in cyberspace and a so called web portal that has not had pertinent content updates in years and many facets of it appear to be presented by dead end content.  This disinformation is in need of balance and the effects of the cancellation of this contract’s benefits hits home harder now close to 10 years later more than ever. 

Imagine the savings in energy expenses and the increase in quality of life for the low income, housing residents who would have benefited from this cancelled HUD program.  Fred Seigel’s Energy Capital Partners innovative and forward thinking green campaign and awareness of the importance of efficient energy delivery for all should be lauded.  Regardless, of which version of the story led to the cancellation of such an energy conscience concept, it should be known that the program was ahead of its time and should have been instituted as planned.

The Daily Republican is a dated publication.  The follow up story of how Energy Capital Partners and Fred Seigel were victorious in it’s lawsuit against HUD was never published.  The victory awarded to Energy Capital Partners and Fred Seigel was a rare one indeed.  There were very few lost profit suits vs HUD/the United States that were won in favor of the plaintiff.  It’s of significant note that the Judge in this case found for Energy Capital Partners.

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Facts on File - 2004

Court Orders HUD to Pay $8.8 Million

Judge Edward Damich of the Court of Federal Claims in Washington, D.C. August 21 ordered the Department of Housing and Urban Development (HUD) to pay $8.8 million in damages for reneging on a contract with a lending company. HUD had accepted liability for backing out of the contract with the company, Energy Capital Partners of Boston, Massachusetts, but had said it would appeal the amount of the award, it was reported August 24.

The lawsuit stemmed from a contract issued by HUD in September 1996 to Energy Capital Partners to administer $200 million in loans to upgrade energy efficiency in low-income housing. HUD had reneged on the contract in February 1997, a week after the Wall Street Journal had printed an article revealing that Alan Leventhal and Fred Seigel, the principals in the company, had donated $3 million to President Clinton’s 1996 reelection campaign. The article portrayed the contract as a sweetheart deal. HUD’s action prompted Energy Capital Partners to sue for lost profits.

A 1998 HUD internal report had concluded that “tremendous pressure was brought to bear by political appointees on career employees” to approve the deal. However, Seigel had claimed that no evidence of political interference had been produced in court, it was reported August 25. Howard Glaser, who had been HUD deputy general council at the time, corroborated the report’s findings, and also claimed that the contract had favored Energy Capital Partners by requiring HUD to absorb the bulk of the cost of defaulted loans.

In his opinion, Damich wrote that although there had been few successful lost profits cases against the U.S., the facts in the HUD case supported the award. In particular, he noted, “The market for the service available under the contract was easily identifiable and willing to pay for this service.”

He also cited a line in the contract that had granted Energy Capital Partners 30 days to solve any problems before termination. The contract had been cancelled after only one week’s deliberation.

Copyright 2000 Facts on File, Inc.

Beacon Capital Partners

Fund of the Year 

April 20, 2007

The Blackstone Group

Through its opportunity funds, Blackstone was the dominating force in the commercial real estate market in 2006 and completed a number of public to private transactions. The group, headed by Jon Gray, saw its activity culminate with the acquisition of Equity Office Properties Trust in the biggest REIT public to private deal ever completed. 

Broadway Partners

Broadway Partners scooped up Boston’s iconic John Hancock Tower, Citibank Center in L.A. and 333 West Wacker in a multi-property portfolio acquisition that spanned the country. Scott Lawlor’s firm exploded onto the scene 2006 acquiring Manhattan trophies 522 Fifth and 340 Madison as well. The firm shows no signs of slowing down in 2007.

Beacon Capital

Alan Leventhal’s Beacon Capital Partners spent much of 2006 scooping up trophies such as New York’s 1211 Sixth Avenue from Jamestown for $1.52 billion and One Beacon Street in Boston for $423 million. Beacon proved it was among the most aggressive firms out there on some of the hottest trophy deals on the market. The firm also sold a number of large portfolios, including one of its opportunity funds.

Thomas Property Group

Los Angeles-based Thomas Properties Group put its money where its ecologically-minded mouth was last year, raising a $500 million fund dedicated to environmentally friendly commercial real estate ­ the first fund of this kind. The firm plans to develop and retrofit office buildings to meet LEED-certification guidelines.

Copyright 2007 Euromoney Institutional Investor PLC

Beacon Capital to pay $390m for half of One Financial

Source:  Boston Real Estate News

Tuesday, September 4, 2007

Beacon Capital Partners LLC, which had sold most of its Boston-area real estate, is jumping back in as a buyer despite record high prices for commercial properties, agreeing to acquire half of One Financial Center for a reported $390 million. The Boston private real estate investment trust run by Alan Leventhal and partners is buying the interest held by Rose Associates Inc. of New York since Rose developed the 46-story tower in 1984. Along with One International Place, it is one of downtown’s two tallest building

Source:  Boston Real Estate News

Beacon Capital Seen Raising Sixth Fund After Close of $4B Blockbuster

Despite the white-knuckle atmosphere of the credit crisis, it’s still a heady time for commercial real estate, and especially for private equity fundraising. Capital flows to the sector are expected to increase or at least remain at the same robust level through the year and for 2008, according to a survey conducted by Ernst & Young. In addition, private equity fund sizes continue to grow.

One such private equity player said to be back raising funds after a blockbuster fundraising effort for its fifth fund, Beacon Capital Partners LP is believed to be quietly raising capital for its sixth vehicle in a series of investment funds that has raised more than $8 billion in capital over the past nine years.

Beacon, a Boston-based firm led by Alan Leventhal, had blockbuster success with its fifth fund, besting its initial target of $3 billion to raise a total of $4 billion in equity. With leverage, the fund - which just closed last month - has a buying power of around $10 billion and is considered the largest global office-focused fund ever to be raised.

Beacon’s typical investment strategy is a value-add approach with a focus on office properties in top urban markets with supply constraints, such as New York, Boston, Seattle, WA, San Francisco, Washington, D.C., Los Angeles and Chicago. Its past two funds have also branched out into international investments, including recent acquisitions in London and Paris reportedly valued at more than $5 billion.

Typical investors include a smattering of public pension funds, such as CalSTERS, Pennsylvania PSERS, TRS of the State of Illinois, and others, such as Onyx Global Capital.

With the fifth fund reportedly about 80% invested, the timing is right for Beacon to start fundraising for another vehicle, said a source. Given the success of each fund, wherein each new vehicle virtually doubles the capital raised by the preceding fund, Beacon’s next investment vehicle could be a whopper, if not another record-breaker. Beacon declined to comment for this article.

And Beacon Capital isn’t alone. According to Ernst & Young, real estate private equity funds raised $23 billion iIn the first half of 2007, and an additional 35 funds with targets of about $35 billion are in the process of fundraising. In 2006, $38 billion was raised.

Another notable fund that closed recently is a $3 billion vehicle raised by The Carlyle Group, Carlyle Realty Partners V. And there are more than a few heavy-hitters out there still raising capital, according to Private Equity Intelligence: Blackstone is said to be raising $10 billion for its sixth real estate fund; CB Richard Ellis Investors is targeting $4 billion for its fifth fund; Rockpoint Real Estate Fund III is targeting $2.5 billion as are both Walton Street Real Estate Fund VI and Stockbridge Real Estate Fund III. In total, those funds add up to $21.5 billion.

Then there’s the question of deploying the capital. Some say the current credit crunch will make it difficult for funds to build up their actual real estate portfolios. Others say it’s a prime time to jump on opportunistic investments. And there’s talk of many private equity players building up their war chests to take advantage of the liquidity crisis.

Beacon’s strategy of acquiring value-add properties in top markets that appeal to institutional investors should continue to prove a lucrative approach. Recent acquisitions by the fifth fund include a 50% stake in One Financial Center, a 1.1 million-square-foot office building in Boston for $390 million that is also owned by MetLife, and the $750 million purchase of a 37-story office in Lower Manhattan known as One Financial Square. The fund also added some bulk earlier in the year by acquiring a number of properties in Seattle and the Washington, D.C., metro area for about $6.3 billion when Blackstone flipped some of the EOP assets.

Earlier this year, Beacon liquidated all of the assets in Fund III, a portfolio of Class A office assets encompassing about 26 buildings spanning 10 million square feet. New York-based Broadway Real Estate Partners LLC paid more than $5 billion for the portfolio.

The duo struck a similar deal for the assets in Fund II. Broadway paid about $3.5 billion for the 10-property, 7 million-square-foot portfolio from Beacon.

Article Courtesy of:  CoStar Group

October 24, 2007
Written by Jillian Ambroz

Alan M. Leventhal, Chairman and Chief Executive Officer

Mr. Leventhal is the founder of Beacon Capital Partners.  Previously, Mr. Leventhal served as President and Chief Executive Officer of Beacon Properties Corporation, one of the largest real estate investment trusts (REIT) in the United States.

Mr. Leventhal received his Bachelor’s degree in Economics from Northwestern University in 1974 and a Master of Business Administration from the Tuck School of Business at Dartmouth in 1976.  Mr. Leventhal is Chairman of Boston University’s Board of Trustees, a life trustee of Northwestern University and an overseer of the Tuck School of Business.  He also serves on the board of the Pension Real Estate Association (PREA), the board of the Damon Runyon Cancer Research Foundation, and the board of Friends of Post Office Square.

Mr. Leventhal has lectured at the Tuck School of Business and the Massachusetts Institute of Technology Center for Real Estate.  Mr. Leventhal was awarded the Realty Stock Review’s “Outstanding CEO Award” for 1996 and 1997, and the Commercial Property News “Office Property Executive of the Year” for 1996.  In 2004 he received Ernst & Young’s New England Entrepreneur of the year award.