6. September 2017

press

Peakside Capital and Madison International Realty complete aquisition of Frankfurt Airport Center 1

The joint venture of Peakside Capital, the independent, owner-operated real estate investment manager with offices in Frankfurt, Warsaw, Prague, Zug (CH) and Luxembourg, and Madison International Realty (Madison) have completed the acquisition of a leasehold interest in Frankfurt Airport Center I (“FAC I”). The seller was UBS Real Estate GmbH on behalf of Publikums-AIF UBS (D) Euroinvest Immobilien.

FAC I comprises more than 48,000 sqm of flexible office and conference space with direct access to Terminal 1 of the Frankfurt International Airport. The asset is located in a superior, irreplaceable and highly visible location with unrivalled transport connections as well as 182 parking spaces. It is located next to the ICE train station with regional and high speed long distance trains. The A3 motorway (Autobahn) which crosses from East to West Germany passes the building while the A5 which runs North to South is less than 3 kilometres away. Frankfurt’s CBD can be reached by car or train within 15 minutes.

Ahead of the completed transaction, the parties successfully extended the fixed term of the leasehold from 2060 until 2090. With 40% vacancy, there is significant scope to refurbish and improve the letting profile of the building which currently includes Lufthansa, FRAPORT AG and the Airport Club as tenants along with 70 others.

Peakside Capital’s investment was through Peakside Real Estate Fund II (PREF II), the Germany-focused value-add and opportunistic fund which is now fully committed. Following the successful deployment of PREF II, Peakside Capital is currently fund raising for PREF III, which will adopt the same investment strategy.

The transaction will add another valuable asset to Madison’s portfolio, illustrating its strength in acquiring partial ownership and joint venture interests in existing grade A properties in prime markets in U.S., U.K. and Western Europe.

Peakside is responsible for the operational management of FAC I. To support the repositioning of the building, Peakside has employed Frankfurt-based ERWE Real Estate GmbH as project manager to control and coordinate different specialist contractors with regards to the refurbishment of the building. Fantastic Fox Capital Advisors GmbH has been employed to manage the letting of the office and retail space.

The buyer has been advised by CBRE, Clifford Chance and by Hauck Schuchardt Senior debt financing is provided by HSH Nordbank

Boris Schran, managing partner of Peakside Capital, commented:

“Having secured this landmark site and successfully extended the leasehold, now the work begins to significantly enhance the asset. This irreplaceable asset is in one of the best connected locations in Germany and has the potential for us to apply our proven asset management capabilities in the dynamic and thriving Frankfurt office market. ”

Matthias Cordier, Head of Investment Germany, Madison, added: "This is a significant transaction for Madison as it has allowed us to acquire partial ownership of a property in an irreplaceable prime location in one of our target markets. We are excited to enter into a new partnership with such a reputable firm and look forward to create further value in repositioning the property."

For further Information:

Dido Laurimore / Tom Gough

FTI Consulting

+44 (0) 20 3727 1000

Note to Editors

Peakside Capital is a specialist European Investment Manager, owned by its management. It manages real estate assets currently totalling over EUR 1 billion in gross asset value with a focus on CEE and Germany. The company has offices in Frankfurt, Munich, Zug (CH), Warsaw, Prague and Luxembourg.

Peakside Capital provides fund management and investment advisory services for managed portfolios that include its four real estate funds and a significant number of separate account investments.

The investment strategies it pursues serve the individual requirements of its investors, and range from core to opportunistic across the office, residential, hotel and retail sectors. The investment spectrum comprises investments in single assets and portfolios through to distressed debt and investments in real estate operating companies.

About Madison International Realty

Madison International Realty (www.madisonint.com) is a leading liquidity provider to real estate investors worldwide. Madison provides joint venture and preferred equity capital for real estate owners and investors seeking to create an exit strategy; or where existing sponsors seek to sell a portion of their ownership position and take on a partner. The firm provides equity for recapitalizations, partner buyouts and capital infusions; and acquires joint venture, limited partner and co-investment interests as principals. Madison invests only in secondary transactions and focuses solely on existing properties and portfolios in the U.S., U.K., and Western Europe. Madison has offices in New York, London and Frankfurt, Germany, where the firm operates under the name of Madison Real Estate Beteiligungsgesellschaft mbH.

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