Arminius funds take control of EUR 1b Eurocastle portfolio

German fund manager Arminius has announced that two of its vehicles have acquired a controlling majority stake in a portfolio of 28 German properties with a market value of about EUR 1 bn belonging to Amsterdam-listed Eurocastle Investment.

Amsterdam-listed Eurocastle Investment sold the stake as part of a loan restructuring of its Mars fixed portfolio. The two Arminius funds were existing junior lenders to the portfolio.

Eurocastle said that lenders to the facility agreed to an extension of the term to July 2014, the deferral of a significant part of the facility's current interest margin and new capital from a junior lender for capital expenditure.

Eurocastle's German asset management platform will continue to provide asset management services to the portfolio and will be compensated for these services over an anticipated minimum three-year term.

'In consideration of these terms, Eurocastle has agreed to transfer half of its remaining equity investment in the Mars Fixed Portfolio to a junior lender who will control 75% of the equity in the portfolio, leaving Eurocastle with a 25% residual investment in the portfolio,' the Amsterdam-listed closed fund said.

Arminius said that it will be committing additional funds for capital expenditures and tenant improvements to stabilise the portfolio over the next years.

Arminius manages closed-end real estate funds focused on investments exclusively in Germany. Encompassing both direct real estate and real estate debt, the firm currently has EUR 2 bn of assets under management. Frankfurt-based Arminius Kapitalgesellschaft is the exclusive investment and asset management advisor to Arminius.

Eurocastle Investment Limited is an investment company which primarily owns and manages German commercial real estate assets. The company is managed by an affiliate of the US Fortress Investment Group.