NorthStar Realty Europe Sells Frankfurt’s Trianon Tower

By Gail Kalinoski

Trianon Tower

NorthStar Realty Europe Corp. (NRE) has sold the iconic Trianon Tower, a 737,360-square-foot office building in Frankfurt, Germany, for approximately $758 million to IGIS and Hana Financial Investment, a South Korean consortium.

Constructed in 1993 at Mainzer Landstrasse in the heart of Frankfurt’s CBD and banking district, the triangular-shaped tower is the sixth tallest building in Germany at 610 feet. NRE has owned the 46-story asset, its largest, since acquiring the building in July 2015. Back then, the company purchased it from a venture between Madison International Realty and the Morgan Stanley Eurozone Office Fund for about $590 million. Since acquiring the tower, NRE completed an extensive refurbishment program, including elevator and lobby renovations. The building achieved LEED Platinum certification in September 2018.

“Having completed a number of complex, value-enhancing asset management initiatives during our ownership period, we are pleased to announce the sale of Trianon. The sale crystallizes an approximate 20 percent IRR and further enhances NRE’s track record of consistently creating value for stockholders since inception,” said Mahbod Nia, Northstar Realty Europe’s CEO & president, in a prepared statement.

Since the repositioning, NRE leased seven vacant floors and secured lease extensions from Deutsche Bundesbank, the building’s second-largest tenant, and Franklin Templeton, the third-largest tenant. The office tower is now fully leased with 90 percent of the rent derived from long-term leases with Deutsche Bundesbank and Dekabank.

Cushman &Wakefield handled deal

Cushman & Wakefield advised on the sale of the property. “The sale follows a comprehensive global marketing campaign, which saw the building generating significant interest from a broad spectrum of investors in Europe, China, Hong Kong, Singapore and South Korea,” Argie Taylor, head of APAC Cross Border Capital Markets at Cushman & Wakefield, said.  

Richard Tucker, head of Capital Markets Frankfurt at Cushman & Wakefield, stated the Trianon, “is perfectly positioned to not only benefit from the projected out-performance of Frankfurt rental growth, but also from the city’s appeal as a leading global financial center.”

More Frankfurt moves

Last month, Madison International and Peakside Capital AG sold the shares for an office property of the Frankfurt Airport Center to a partnership between Godewind Immobilien AG and ERWE Immobilien AG for $190 million in an off-market deal. Peakside acquired the asset on behalf of its Peakside Real-Estate-Fund II last year and Madison made an investment through the International Real Estate Liquidity Fund VI.

After the purchase, the investors extended the fixed term of the leasehold with the airport operator until 2090 and signed approximately 108,000 square feet of space to new and current tenants. The property has direct access to Terminal 1 of the Frankfurt International Airport, includes 182 parking spaces and is adjacent to a train station.

Image courtesy of Cushman & Wakefield