Madison takes 57% stake in Frankfurt's Trianon tower

US real estate investor Madison has confirmed the acquisition of the 56.9% stake held by Morgan Stanley's P2 Value fund in the Trianon office tower in Frankfurt. The sale is part of the liquidation of the P2 Value fund. Morgan Stanley Eurozone Office Fund holds the remaining stake in the building.

Cologne-based real estate asset manager Art-Invest Real Estate participated in the deal alongside Madison

The financial details of the transaction - which was first signalled in February by Financial Times Deutschland - were not disclosed. However the 47-floor office tower at Mainzer Landstraße in Frankfurt's banking district was believed to have a book value of EUR 471 mln.

Morgan Stanley paid EUR 357 mln in 2007 for its interest in Trianon, but the stake is said to have significantly shed value over the past five years, due to the 15% vacancy rate and the building's capital expenditure needs. In a P2 Value report issued in September, the property was valued at EUR 257 mln.

The tower is 186 metres in height and, together with the adjacent residential buildings, comprises 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.

Based in New York, Madison focuses on acquiring secondary equity capital in core real estate properties. Its portfolio of investments comes to $820 mln (EUR 621 mln).