Tishman Refinances Renowned French Office Tower for $571M
- Jul 30, 2012
Lenders are not exactly generous with loans these days, but they are shining their light upon certain properties, and the Lumière Building in Paris is one of them. Tishman Speyer, owner of the nearly 1.5 million-square-foot tower, has just completed the $571 million refinancing of the premier property, courtesy of a loan transaction spearheaded by French insurer BNP Paribas.
Tishman Speyer has called the 20-year-old building its own since 2006, when the New York City-headquartered real estate company’s European Strategic Office Fund acquired it from Blackstone for the equivalent of approximately $834 million. In addition to Class A office space, the seven-story property encompasses roughly 100,000 square feet of retail space, 220,000 square feet of warehousing, as well as underground parking for the accommodation of 1,700 vehicles.
It’s a safe risk, and the BNP-led consortium of fellow French insurers Cardif, CNP and Predic took it and crafted a groundbreaking transaction. The financing deal is the first in Europe to be structured through a mortgage bond private placement secured by a first-ranking mortgage on the property. It also marks the largest real estate financing deal in France for a single asset since the glory days of 2007, when lenders were practically handing out loans like candy.
As anticipated, insurers are increasingly stepping up to the plate to provide loans for commercial real estate properties–well, certain commercial real estate properties. “We think capital will remain available to finance good assets located in the ‘right’ locations; we think that either banks will be happy to refinance loans on such assets or alternative financing will readily fill the gap should banks wish to exit,” Morgan Stanley noted in a research paper released earlier this year on Europe’s gargantuan financing gap. The “right” locations are London and Paris.
In addition to having location on its side, Lumière has the right stuff. It became 100 percent leased last year after the French Ministry of the Interior entered into an agreement for 400,000 square feet of space. To top it all off, the property carries the distinction of being the largest privately owned office building in Paris.