SEB Immobilien-Investment GmbH is taking advantage of the upturn in the New York real estate market to increase its involvement abroad. The fund management company has bought "One Park Avenue", an office and commercial building in the centre of Manhattan, for its open-ended real estate fund SEB ImmoInvest, as a majority investment in a share deal. In the course of the company acquisition, SEB ImmoInvest is taking over a 75 percent interest from Credit Suisse First Boston for USD 242 million (EUR 187 million). Due to the preferred return structure laid down in the shareholder agreement, the Fund will also enjoy preferential rights to an 8.5 percent p.a. distribution by the company for the entire holding period of the property. The co-shareholder (25%) remains US REIT SL Green Realty Corp., which is also the managing partner.
97 percent of the 20-storey building, which spans an entire block and offers a total of 86,151 mÂ² of rental space is let to 14 companies, including Citibank, Baroda Bank, Fidelity, New York University Hospital and Consultant Segal. The structure of the terms of the leases is well balanced and extends until 2020. The companies' long-term commitment underlines the popularity of the location.
"One Park Avenue" is in Midtown, New York's largest and best-selling submarket, on the east side of Park Avenue between 32nd and 33rd Streets, level with the Empire State Building. The upturn in the New York office market which started in 2003, particularly in the Midtown submarket, has continued as expected. The low vacancy rate of 8 percent and the climbing rents are evidence of the high demand for office space in this location.
One Park Avenue
At "One Park Avenue" alone, a total of 8,300 mÂ² (around 10% of the area of the total property) was newly let or re-let in the past year.
The property meets the key requirements for open-ended real estate funds â" stable long-term income â" as well as offering the potential for further rent increases in view of the rising demand for office space.
Source: SEB ImmoInvest