The joint venture of Peakside Capital, the independent, owner-operated real estate investment manager with offices in Frankfurt, Warsaw, Prague, Zug (CH) and Luxembourg, and Madison International Realty (Madison) have completed the acquisition of a leasehold interest in Frankfurt Airport Center I (“FAC I”). The seller was UBS Real Estate GmbH on behalf of Publikums-AIF UBS (D) Euroinvest Immobilien.
FAC I comprises more than 48,000 sqm of flexible office and conference space with direct access to Terminal 1 of the Frankfurt International Airport. The asset is located in a superior, irreplaceable and highly visible location with unrivalled transport connections as well as 182 parking spaces. It is located next to the ICE train station with regional and high speed long distance trains. The A3 motorway (Autobahn) which crosses from East to West Germany passes the building while the A5 which runs North to South is less than 3 kilometres away. Frankfurt’s CBD can be reached by car or train within 15 minutes. The building is currently let to Lufthansa, FRAPORT AG,the Airport Club and numerous other tenants.
Ahead of the completed transaction, the parties successfully extended the fixed term of the leasehold from 2060 until 2090. The current vacancy allows for strategic repositioning of the building with first lettings already achieved.
Peakside Capital’s investment was through Peakside Real Estate Fund II (PREF II), the Germany-focused value-add and opportunistic fund which is now fully committed. Following the successful deployment of PREF II, Peakside Capital is currently fund raising for PREF III, which will adopt the same investment strategy.
The transaction will add another valuable asset to Madison’s portfolio, illustrating its strength in acquiring partial ownership and joint venture interests in existing grade A properties in prime markets in U.S., U.K. and Western Europe.
Peakside is responsible for the operational management of FAC I. To support the repositioning of the building, Peakside has employed Frankfurt-based ERWE Real Estate GmbH as project manager to control and coordinate different specialist contractors with regards to the refurbishment of the building. Fantastic Fox Capital Advisors GmbH has been employed to manage the letting of the office and retail space.
The buyer has been advised by CBRE, Clifford Chance and by Hauck Schuchardt Senior debt financing is provided by HSH Nordbank
Boris Schran, managing partner of Peakside Capital, commented: “Having secured this landmark site and successfully extended the leasehold, now the work begins to significantly enhance the asset. This irreplaceable asset is in one of the best connected locations in Germany and has the potential for us to apply our proven asset management capabilities in the dynamic and thriving Frankfurt office market. ”
Matthias Cordier, Head of Investment Germany, Madison, added: “This is a significant transaction for Madison as it has allowed us to acquire partial ownership of a property in an irreplaceable prime location in one of our target markets. We are excited to enter into a new partnership with such a reputable firm and look forward to create further value in repositioning the property.”
