Mercer Real Estate Partners, a privately-owned real estate investment firm, has completed the acquisition of Mitre House in Farringdon for a £64m gross sale price, in a repositioning investment play as sole tenant CMS Cameron McKenna is due to vacate at the expiry of its lease within two years.
Capita Asset Services, the special servicer on the defaulted £75.8m Eagle Office Portfolio loan for which Mitre House is the last remaining property, has confirmed this afternoon that the sale completed on Tuesday.
Mitre House, the 188,675 sq ft City fringe office block at 160 Aldersgate Street, sold for 9.5% discount to its £70.75m last valuation on 30 March 2012.
The sale at £64m reflects a 15.6% discount to the unpaid balance of the securitised senior loan in the Cornerstone Titan 2005-1 plc, and a 37.3% discount on the outstanding whole loan balance, which includes £26.2m in remaining junior debt.
The previous owners were Brookdale, the Irish property company, and Delek Real Estate, which owned the property through Supreme Property Limited.
Brookdale and Delek Real Estate agreed to a consensual sale of Mitre House after the loan defaulted at maturity and fell significantly below the outstanding debt balance.
Mitre House was refinanced by Credit Suisse in July 2005, prior to its roll-up into the Cornerstone Titan 2005-1 CMBS, at which stage the office block was valued at £114.75m, which implies a fall in value of 44.2% over the last eight years, which the recovery in City offices offset by the property’s declining lease.
Cameron McKenna signed a 25-year lease over 140,000 sq ft and three floors at Cannon Place, above the Cannon Street train and tube station, as first revealed by CoStar News in March.
In January 2012, Cameron McKenna u-turned on the pre-let of Hammerson’s 599,000 sq ft office tower development, Principal Place, citing current uncertainties in financial markets.
Mercer Real Estate Partners is a specialist in office repositioning, with this purchase following the acquisition Carlow House, the Old Bakery, in Camden which is due to close in December, and the acqusition of Harman House at 1 George Street in March.
Mercer described its investment strategy on its website as focused on proactive asset management and downside protection to drive superior risk-adjusted returns.
Mercer Real Estate Partners declined to comment.