Pbb provides EUR 88m to Catalyst for Paris deal

German lender pbb Deutsche Pfandbriefbank has said it is providing just under EUR 88 mln in funding to Catalyst European Property Fund for its acquisition of the landmark Front de Parc office complex Clichy-la-Garenne, northwest of Paris.

Earlier this month PropertyEU revealed that UK-based Catalyst Capital was on the verge of acquiring Front de Parc, which was part of a CMBS loan that is due to mature in November 2011 and is currently being unwound. The failed loan was originated by Barclays Bank and securitised in May 2007 by its special servicing unit, Barclays Capital Mortgage Servicing (now Capita Asset Services) as part of the larger Juno 'Eclipse 2007-2' Ltd CMBS transaction.

Catalyst's acquisition of the loan follows two years of protracted negotiations with the special servicer and bondholders. The original owner, UK investment fund Cambridge Place, defaulted on the loan after the main tenant, Fnac, vacated the premises in June 2008, causing the vacancy rate to rise to 40%. The owner was subsequently unable to provide the funding needed to refurbish the office space to attract a new tenant.

pbb Deutsche Pfandbriefbank said the funding facility provided to Catalyst includes a refinancing tranche, two capital expenditure tranches and a VAT line. This is to support the acquisition, refurbishment and re-letting of the office scheme by the Catalyst European Property Fund. The transaction was closed on 12 May 2011.

The Front de Parc complex is made up of four office buildings and comprises a total of 32,900 m². It is built around the main Eiffel building, the facades and roof of which are listed as 'monuments historiques de France'. The property is currently close to 60% let to three tenants.

The bank said this provided an opportunity for Catalyst Capital to add substantial value by refurbishing the empty space and attracting a blue chip tenant for its headquarters.