Credit Suisse Real Estate Fund International (CS REF International) in recent months has acquired four first-class office buildings located in Boston, Washington D.C., Bristol and Leeds, UK at a price tag of roughly CHF 266.5 million. Entry into the US market and re-entry into the British market comes in the wake of a phase of substantial corrections on the real estate markets. In addition to interesting returns, all the properties harbor promising potential for long-term appreciation in value as well.
Launched at the beginning of 2005, the CS REF International real estate fund has taken advantage of the, in some cases, severe slumps in property prices on the North American and British markets in order to expand its portfolio through the acquisition of four first-class office buildings situated in privileged locations.
"The fund's abundant capital resources and high level of transaction security, as well as the resolute and credible way negotiations were conducted, proved to be a decisive advantage versus the various other bidders during the sales and contract bargaining sessions," according to Rainer Scherwey, Fund Manager.
The certified acquisition prices for the four properties amount to a converted equivalent of roughly CHF 266.5 million. Stabilized net returns hover in the range between 7.4% and 8.3%. With the acquisitions in Washington D.C. and Boston, the fund has now invested in the USA for the first time.
1099 New York Avenue in Washington D.C.
CS REF International succeeded in acquiring the office building 1099 New York Avenue situated in the US capital for USD 90.5 million. The property is regarded as an exclusive address that ranks among the so-called trophy buildings in Washington D.C. thanks to its outstanding architecture, high-quality structure and privileged location. In 2008, the Washington Business Journal dubbed the property the 'Washington D.C. office building of the year.'
The building was erected between 2006 and 2008 by real estate developer Tishman Speyer and is distinguished from other commercial properties in the vicinity by its transparent façade of overlapping glass panels. The law firm Jenner & Block, LLP, is the primary tenant, which holds a long-term rental contract. Thanks to the ideal location, there is also strong interest in the office space that is currently still un-leased (amounting to about 38%). 1099 New York Avenue is situated close to the White House as well as the city's leading hotels.
Independence Wharf in Boston
CS REF International managed to execute a real coup with the acquisition of the 14-story property Independence Wharf in Boston. The purchase price amounted to US $106.3 million. The building, situated on 3,361 square meters of property, was originally constructed in 1927 as a warehouse and restructured as an office building in 2001. The location is absolutely unparalleled, right in the heart of the
coveted financial district, direct on Boston's pulsating waterfront and in the neighborhood of the InterContinental Hotel, which opened in 2006.
Independence Wharf's value underwent a substantial boost in appreciation thanks to the construction of the Rose Fitzgerald Kennedy Greenway. The sprawling public park, now situated on the covered city expressway, was constructed on the site of the former street viaduct. Nevertheless, Independence Wharf is located in immediate proximity to the city expressway. The South Station commuter railway and Logan Airport Water Shuttle are situated practically at the building's doorstep. In addition, all the floor space is leased on a long-term basis, with the exception of one floor and some retail space on the ground floor.
Temple Quay in Bristol
CS REF International's management decided to re-enter the real estate market in Great Britain, taking into account the weakened recession and noticeably diminished property prices in the UK. The fund had exited the UK real estate market in 2007 with the divestiture of Cromwell House in London. In a first step toward re-entry, the focal point o