The First American Corporation (NYSE: FAF), the largest provider of business information in United States and the leading provider of title insurance services internationally, has announced the launch of operations in Frankfurt, Germany. First European Title GmbH, a limited liability company, will market and promote insurance solutions from First Title Insurance plc for lenders, investors and developers across Europe.
First Title Insurance plc, a subsidiary of First Title plc, is the United Kingdom's largest provider of title insurance and conveyancing services and a wholly owned subsidiary of The First American Corporation. First Title's Frankfurt office, which opens Feb. 22, will be located at Mainzer Landstrasse 46, 60325 Frankfurt. Michael Schuh will oversee the Frankfurt office as First Title Insurance plc's new European Managing Director.
Germany's central location will play a key role in the European expansion of First Title's insurance division. Frankfurt is one of the most active European financial markets outside London and provides many resources for investments into the eastern European markets where First Title has built a strong presence. First Title currently has offices in Budapest, Hungary and Warsaw, Poland servicing the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Croatia. In 2006, First Title's new European division accounted for 23 percent of the income of its insurance division.
To coincide with the launch of its Frankfurt operation, First Title has developed insurance coverage specifically for the German market that protects against potential risk of invalid lease agreements due to lack of certain German Civil Code written form requirements. "This is a major, common headache for investors in tenanted commercial buildings and their lenders," said Jan Sudmeyer of Squire Sanders & Dempsey LLP. "This voidable lease insurance by First Title is the first in the market to address this risk on the basis of the title insurance approach. This should give investors increased comfort in dealing with property portfolios where invalid leases may exist and potentially pose a threat to cash flows."
The expansion into Germany builds upon First Title's experience in the European commercial mortgage-backed securities (CMBS) market. In August 2006, First Title insured Europe's largest ever CMBS transaction against potential title defect, a €5.4 billion debt issue by Deutsche Annington encompassing more than 160,000 residential apartments throughout Germany.
Dr. Geza Martin Toth-Feher, a private equity partner at Paul Hastings, said, "We are delighted to see our client, First Title, successfully move into one of the very active markets in Western Europe. In my experience of having advised a wide variety of equity sponsors in the German real estate asset class, I am convinced that First Title's products will contribute to successful securitisation of German mortgage debt. It is very nice to see innovative Anglo-Saxon style products find their way into more conservative markets, and we are very proud to be part of that development."
Source: First Title