German Bank Finances $241M in North American Office Sales

Going against the tide of the currently stalled credit markets, German-based DekaBank has provided financing totaling $241.5 million for the acquisition of office properties in Los Angeles and Montreal over the last few weeks. DekaBank Deutsche Girozentrale closed a $175 million financing to Hines U.S. Office Value Added Fund II L.P. for the acquisition of Citigroup Center, a 48-story landmark office property in Downtown Los Angeles, which CPN reported on Sept. 19. The seven-year loan is fully underwritten and funced by DekaBank, A spokesman for Estate Lending North America at DekaBank said the Hines deal is a good example of the bank’s long term business strategy, which focuses on top tier assets in prime markets and relationships with strong sponsors. DekaBank also financed a $66.52 million Canadian term loan for a consortium of private investors led by the Saputo family to acquire La Tour CIBC, a landmark office tower in the heart of Montreal’s Financial District. The 565,000-square-foot Class A office complex is substantially leased and home to several national tenants, including Canadian Imperial Bank of Commerce as well as Stikeman Elliott L.L.P. and Miller Thomson L.L.P., two of Canada’s largest law firms. The transaction also marks the second time, DekaBank and Allied Irish Bank teamed up on a real estate financing in Canada with AIB contributing $25 million towards the loan pursuant to the closing. After recording five consecutive years of steady occupancy gains and robust rent growth, the Los Angeles office market is forecast to soften modestly this year, with fundamentals returning to more sustainable levels, according to a second quarter report by Marcus & Millichap Real Estate Investment Services. Investment sales in the Los Angeles office market have slowed in recent months, due in part to tighter underwriting standards, according to the Marcus & Millicap report. Since the second half of 2007, lenders have become more concerned with current operations, property quality and location, preferring to lend on top-tier assets in historically tight neighborhoods. DekaBank is the German Savings Bank Finance Group’s central asset manager. DekaBank’s roots date back to 1918, when Deutsche Girozentrale (DGZ) was founded. Deka as an investment company was founded in 1956; DGZ and Deka joined forces to create DekaBank in 1999. With managed fund assets of about € 190 billion, more than 5 million customer deposits and group locations in Luxembourg, Switzerland and Ireland, the DekaBank Group is one of the largest asset managers in Germany.