UPDATE: Publity takes ownership of vacancy-plagued City Tower in Offenbach

Leipzig-based investment firm Publity has acquired the City Tower in Offenbach, the tallest building south of the Main river in the Frankfurt area. The financial details were not disclosed.

Offenbach is part of the of the Frankfurt/Rhine-Main metropolitan area and has a population of 117,000. The 140-metre City Tower comprises 25,000 m2 of leasable area over 33 floors and also provides 197 parking spaces on two lower floors. The property has struggled with leasing since it was delivered at a cost of €100 mln in 2003.

The property is one of the assets within the Sanchez portfolio, financed by the Mozart Loan within the Talisman 7 securitisation, which is part of Hatfield Philips International (HPI) loan servicing.

CR Investment Management (CR), the pan-European financial advisory firm, was appointed asset manager and transaction adviser for the portfolio in July 2011. This is the 63rd sale from the portfolio executed by CR since its appointment in collaboration with HPI.

In the transaction CR's role was as advisor to both the lenders and the landlord. CR was supported by Görg as legal advisor and NAI Apollo as broker. Publity AG received legal support from CMS Hasche Sigle.

Prior to the sale, CR's real estate asset management group structured a fully-indexed 21-year lease option with a franchisee of one of the largest global hotel operators for 10,500 m2 or 42% of the building.

'With the lease option in place, CR proved that it is possible to add value to a building with over 12,000 m2 of vacant space and never fully leased since its construction in 2003. The property was converted into an investment product that ultimately attracted a number of both local and international investors,' CR said in a statement.

MANAGE TO CORE STRATEGY
Publity has a 'manage to core' approach for the property and is already in talks with potential tenants to bring City Tower up to full occupancy. 'The purchase of this landmark property in the heart of the Rhine-Main region proves Publity's ability to acquire even large assets from bank recovery,' CEO Thomas Olek said.

Publity plans to acquire six to 10 comparable properties in German cities. Assets in Munich, Frankfurt and Cologne are already in the due diligence process, Olek added.