NorthStar Realty Europe Corp. has completed the sale of the Trianon Tower in Frankfurt, Germany, for €670 million, or approximately $758million based on the exchange rate as of December 12, 2018, realizing an approximate 20% IRR. The transaction releases approximately $360 million of net equity after repayment of financing and transaction costs and a $6 million retained interest in the form of preferred equity certificates with a 7% yield.
The Trianon Tower, with its distinctive triangular shape, is one of the most iconic office towers in Germany and is centrally located inFrankfurt CBD. It is the sixth tallest office building in Germany at 186 metres with a total rentable area of 68,000 sqm over 46 floors and is NRE’s largest asset.
Since acquiring the asset in July 2015, NRE has completed an extensive refurbishment program including elevator, lobby and canteen renovation, full upgrade to latest fire, life & safety standards as well as a rebranding focused on highlighting the building’s credentials as a dominant landmark in the Frankfurt CBD. NRE subsequently leased seven vacant floors and secured lease extensions with Deutsche Bundesbank, the second-largest tenant,and Franklin Templeton, the third-largest tenant, significantly enhancing the value of the asset.
Mahbod Nia, NorthStar Realty Europe’s Chief Executive Officer and President, commented: “Having completed a number of complexes,value enhancing asset management initiatives during our ownership period we are pleased to announce the sale of Trianon. The sale crystalizes an approximate20% IRR and further enhances NRE’s track record of consistently creating value for stockholders since inception.”