LaSalle Sells Spain’s Only LEED Platinum Office Building

CBRE Global Investors snapped up the refurbished heritage property in central Madrid.
General Lacy 23. Image via Google Street View

LaSalle Investment Management has sold Spain’s first LEED Platinum office building to CBRE Global Investors, just over a year after acquiring the Madrid asset on behalf of a German fund.

Located just outside of Madrid’s central business district in the Méndez Álvaro submarket, Calle del General Lacy 23 offers nearly 7,000 square meters (75,347 square feet) of office space and is fully occupied by the headquarters of Spanish energy firm Repsol’s electricity and gas unit.

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Chicago-based LaSalle modernized the property after picking up the 19th century heritage building from Royal Metropolitan in late 2018. The former tobacco warehouse was converted into an office building two decades ago and underwent another renaissance under LaSalle’s leadership, becoming the country’s first office building to achieve LEED Platinum certification.

The company intended to hold the asset for a longer period but the newly sustainable property garnered significant interest from a hungry investment community, prompting the decision to sell. Neither the buyer not the seller have disclosed financial terms of the transaction. Uwe Rempis, head of fund management for Germany at LaSalle, noted in a statement that the company had reaped a “strong capital gain” for the client.

Spanish daily newspaper El Economista reports that General Lacy 23 traded for €47 million, or about $51.9 million. According to the report, LaSalle invested some €4 million ($4.4 million) to refurbish the asset.

Madrid as Global Magnet

Madrid. Image via Pixabay

The Madrid office market is seeing a shortage of available product for sale amid robust investor appetite, particularly among international buyers, according to a Savills report covering the third quarter of 2019. “Foreign capital will continue to be active in the investment market, attracted by economic indicators and the positive performance of market fundamentals,” the brokerage noted.

Foreign capital investment, which has outpaced that of domestic capital since 2017, accounted for 71 percent of office sales during the first three quarters of 2019. Notable office transactions over the last 12 months include U.S.-based Starwood Capital Group’s purchase of the 360,000-square-foot Omega office park in Madrid, as part of a $142.5 million portfolio deal that included an asset in Barcelona.

More recently, Madrid’s GPF Capital Real Estate agreed to acquire the 43,000-square-foot Axis Building, formerly Barclays’ longtime headquarters, from CBRE Global Investors, which had bought the property in 2017.