CORESTATE Group has announced that it has acquired a German high-street real estate portfolio with a market value of 53 million.
The portfolio comprises 20 traditional high-street assets in a number of urban areas across Germany including Aachen, Hamburg, Duisburg and Potsdam. The portfolio was originally acquired by a foreign investor in 2006 and since then vacancy has increased to 30% and net rental income dropped significantly, putting the portfolio and the underlying financing into distress.
The deal included a complex restructuring of debt facilities provided by German and foreign banks. CORESTATE will now undertake its program of active asset management in order to stabilize cash flows.
Phillip Burns, CEO of CORESTATE, said: "The transaction follows CORESTATE's distressed real estate debt strategy, which has been underpinned by our recent research study undertaken in collaboration with the European Business School. We are very pleased to have successfully completed a further complex cross-border debt restructuring with multiple lenders and a multi-faceted ownership.
"The key to unlocking the transaction on this occasion was negotiating a major write-off to the subordinate credit financing. The current market is providing CORESTATE with a number of opportunities which benefit from our skill set but we believe that this is just the beginning and we will see an even greater flow of attractive opportunities coming to the market in the second half of 2012."
Source: FTI Consulting
