Aareal Bank has closed the seven-year €530m senior financing for NorthStar Realty’s €1.1bn pan-European office portfolio acquisition.
NorthStar Realty, which is spinning off around €1.8bn of real estate into a European-listed REIT, acquired the 11-strong office portfolio from SEB Asset Management, the Frankfurt-based property manager of the Swedish banking group, last December.
Aareal Bank’s senior loan reflects just under 50% LTV and has a blended margin of 180 basis points.
Back when the deal was announced in December, NorthStar Realty confirmed that Cale Street Partners, the real estate finance and investment firm set up by former Goldman Sachs banker Ramon Camina-Mendizabal and Ed Siskind backed by the Kuwaiti Investment Authority, would provide some equity and mezzanine financing.
Cale Street Partners sourced the transaction.
The office portfolio is comprised of 11 office buildings in seven of Europe’s major markets: London, Paris, Hamburg, Milan, Brussels, Amsterdam and Rotterdam as well as Gothenburg.
The 186,000 sq m portfolio includes Condor House and Portman Square House (pictured) in London, Issy-les-Moulineaux in Paris and Maastoren in Rotterdam.
The properties are 93% leased with a weighted average remaining lease term of six years. Two-thirds of the current annual rental income is comprised of BNP Paribas, Cushman & Wakefield, Chartis Europe, AIG, Barclays, Invesco UK, Ernst & Young and Deloitte.
Approximately 50% of the Portfolio by rent is derived from properties located in London and Paris. NorthStar Realty expects to earn an initial leveraged yield of approximately 13%, based on estimated year-one net operating income.