CC - Gizmo23
Trianon - Frankfurt
The US REIT NorthStar Realty Finance Corp. is expanding its European portfolio with the acquisition of landmark Frankfurt skyscraper Trianon, in the heart of the banking capital's business district, for €540m.
The acquisition comes on top of the American group's recent takeover of a €1.1bn pan-European office portfolio from SEB Asset Management, followed by buying a 15% stake in private European group Aerium, and then the 37-unit Trias commercial property portfolio from regional German insurer Provinzial NordWest for €450m. NorthStar is developing the European unit to hive it off as a stand-alone REIT on the New York exchange later this year. With the addition of the Trianon, the unit will have an aggregate $2.6bn portfolio.
The 186m-tall Trianon's most recent owners have been Madison International and a Morgan Stanley Fund, with the pair known to have been looking for a buyer for the 69,000 sqm property since last year, after Madison bought a 56.95% stake from Morgan Stanley's ill-fated P2 Value Fund in 2012. At the time the 47-storey office tower was thought to have a book value of €471m. Morgan Stanley itself had paid €620 for Trianon in 2007, at a net initial yield then of 4.2%.
The property has since undergone a significant capex programme, and is 98.5% occupied, with a WALT of eight years for its two prinicpal tenants, the Deka Bank and law firm Linklaters.
NorthStar is investing €250m of equity into the acquisition, saying it expects to achieve an initial yield of 8%. According to chairman and CEO David Hamamoto, "We believe this prominent office tower will be a great addition to NRE given its strong fundamentals, including being one of a very limited number of buildings in Frankfurt with greater than 40 floors, which demand premium rents in the market."
