Peakside capital completes first investment for opportunistic fund
Peakside Capital has acquired a 75 per cent majority stake in a 7,200 square metre office building – SQUARE 41 – in Frankfurt.
The acquisition is the first investment by the company’s new opportunistic fund, Peakside Real Estate Fund II (PREF II).
Prior to the transaction, the asset was jointly owned by Red Square and an American financial investor, who is exiting the market. The asset is located in the heart of Frankfurt’s financial district and is extremely close to Frankfurt’s Old Opera and the renowned shopping high street of Goethestrasse.
The asset benefits from a strong base of long term tenants providing a stable income stream. Current tenants include institutions and corporates with a background in the financial industry, such as the European clearing house for SEPA and other banking transactions. Peakside and Red Square are currently planning to commence a number of asset management initiatives to fully lease up the building, including the development of a new underground car park and final fit-out of the vacant units. Since the start of the acquisition process, the partners have already been able to achieve a refinancing, which will extend until 2016, and lease up c. 10 per cent of the vacant space, bringing the current occupancy to almost 70 per cent.
Peakside and Red Square were advised on this transaction by Olswang, Valteq, HauckSchuchardt and Stibbe Luxembourg.
Boris Schran, founding partner and head of origination and acquisition of Peakside Capital, says: "We are very pleased to be able to announce the first investment by PREF II, our new pan-European opportunistic fund which, in line with PREF I, will be focused on sourcing distressed and special situations with active asset management opportunities in Germany, Poland and the Czech Republic. Peakside is now actively looking to source similar investments for PREF II, where we can use our proven asset management skills to create value from underperforming assets, stabilize them, and then make an attractive return for our investors on their disposal.”
Gerald Tschörner, managing director of Red Square, says: “The partnership with Peakside introduces us to additional opportunities in the market and further expansion of our activities, especially in the downtown area. Our positive expectations were met by the improved development of the micro location.”