Madison International Realty, a New York-based investment company, together with its German subsidiary Madison Real Estate (Madison International), has signed a purchase agreement for Morgan Stanley P2 Value's interest in the Frankfurt Trianon complex.
The property is 85% leased.
The 47-floor office tower at Mainzer Landstrasse in Frankfurt's banking district rises to a height of 186 meters and, together with the adjacent residential buildings, encompasses about 69,000 m² of rental space, including 566 parking spaces, some of them open to the public.
The property is 85% leased, predominantly to financial services firms, including the anchor tenant DekaBank on a long-term lease.
The skyscraper, completed in 1993 and featuring a roof in the form of an upside down pyramid, is considered one of the most prominent landmark buildings on the Frankfurt skyline.
The Trianon is currently undergoing certification according to the 'Leadership in Energy and Environmental Design' (LEED) standards. The high‐rise will be one of the first buildings in Germany to reach that level of the LEED standard specially designed for existing buildings. With this certification the building will gain a quality seal that has become increasingly important in today's real estate market. In addition, a comprehensive update of the skyscraper's lobby is planned.
Prior to the current transaction the Trianon complex was owned by Morgan Stanley Eurozone Office Fund (MSEOF), an institutional real estate fund, and Morgan Stanley P2 Value. MSEOF will now be joined by Madison International, an experienced investor specializing in joint ventures. In its focus of acquiring direct secondary equity interests, Madison International will be supported by Cologne‐based Art‐Invest Real Estate, which has also participated in the transaction.
In its focus on acquiring secondary equity capital in real estate, Madison's investment strategy is heavily quality-driven with investments into core properties. The US $820 million portfolio of equity capital participations, which will now be complemented by the prestigious Frankfurt property, does not include any opportunistic investments.
"Madison is the ideal partner for investors looking for an early divestment of their indirect real estate investments," explains Michael Siefert, Managing Director at Madison in Germany.
"Due to the current turmoil in real estate and financial markets we anticipate the need for liquidity to remain strong. In particular structural changes, such as currently experienced by open-end real estate funds, as an example, offer interesting investment opportunities to Madison."
Madison International has raised over US $1.1 billion of equity since it was founded in 1996 by Ronald M. Dickerman. With offices in New York, Frankfurt and London, the firm has become one of the largest acquirers of interests in real estate ventures.
Source: FTI Consulting