Madison International Realty, the New York-based real estate equity investor, and its German subsidiary, Madison International, has bought Morgan Stanley’s 57% equity stake in the Frankfurt Trianon complex for €92m, one of the city’s most prominent offices.
The 47‐floor office tower at Mainzer Landstraße in Frankfurt’s banking district rises to a height of 186 meters and, together with the adjacent residential buildings, encompasses about 69,000 square meters of rental space, including 566 parking spaces, some of them open to the public.
The property is 85% leased, predominantly to financial services firms, including the anchor tenant DekaBank, on a long‐term lease.
Madison, the specialist direct secondary equity investor, acquired the equity stake from Morgan Stanley P2 Value, while Morgan Stanley Eurozone Office Fund (MSEOF), an institutional real estate fund retains a minority interest. Madison International will be supported by Cologne‐based Art‐Invest Real Estate, which has also participated in the transaction.
In its focus on acquiring secondary equity capital in real estate, Madison’s investment strategy is heavily quality‐driven with investments into core properties. The $820m portfolio of equity capital participations, which will now be complemented by the prestigious Frankfurt property, does not include any opportunistic investments.
Michael Siefert, managing director at Madison in Germany, said: “Due to the current turmoil in real estate and financial markets we anticipate the need for liquidity to remain strong. In particular structural changes, such as currently experienced by open‐end real estate funds, as an example, offer interesting investment opportunities to Madison.”
Madison International has raised over $1.1bn of equity since it was founded in 1996 by Ronald Dickerman.
Madison specialises in acquiring existing ownership interests in core properties and portfolios at discounts, providing joint venture equity and acquiring partial interests in order to monetise embedded equity.
Madison also provides equity to shareholders who wish to finance the purchase of shares or a partner buyout, including debt restructuring. Madison International currently manages equity of more than $1.1bn for investments in secondary market transactions.