Hines Global REIT has made its first foray into Germany with the purchase of the Mercedes-Benz bank building in Stuttgart, Germany.
Hines Global REIT has made its first foray into Germany with the purchase of the Mercedes-Benz bank building in Stuttgart, Germany.
The vendor is Guernsey-registered DDE 24 Limited, a subsidiary of troubled private company Develica Deutschland.
Develica, which was taken private in 2011 to avoid liquidation, has been selling off its portfolio in efforts to repay its debt. The company bought the Stuttgart asset as part of a three-property portfolio deal closed at the peak of the market in 2007 for €266 mln.
It financed the acquisition with a €200 mln loan, known as Blue Star, provided by Goldman Sachs. Shortly thereafter, the landlord breached the loan-to-value covenant, with the loan being put into special servicing.
The Stuttgart asset was valued at €88 mln in 2007, and is fully let as the headquarters for Mercedes-Benz Leasing, a subsidiary of Mercedes-Benz Bank, generating a rent of around €4 mln a year. Completed in 2003, the 25,000-m2 building comprises two separate six-story buildings situated at Siemensstrasse 7 in the north end of Stuttgart.
Hines financed the acquisition of the asset with a loan granted by local bank Landesbank Baden-Württemberg (LBBW). Financial details were not disclosed. Colliers Bräutigam & Krämer initiated the transaction.
'The Mercedes-Benz Bank Building is a high-quality asset with a strong tenancy that complements Hines Global REIT's existing portfolio. Germany's economy is one of the strongest in Europe, and by purchasing this asset, we have increased the geographic diversity of the REIT to a fifth country outside of the US,' said Charles Hazen, president and CEO of Hines Global REIT.
Hines Global REIT is a public, non-traded real estate investment trust sponsored by Hines that owns interests in 26 real estate investments located in the US and internationally.
