Multi-stage financing completed for project NEXT in attractive Munich office location
Double-digit IRR achieved for stretched senior financing
Another successful cooperation with the Munich developer CV Real Estate AG
Prime Capital AG, the independent asset manager and financial services provider based in Frankfurt, announced the closing of a large-volume real estate financing for a property company of CV Real Estate in a consortium with LBBW, FAP and Verius Capital. Prime Capital served as arranger for the subordinated financing and also participated in the project with one of its investment vehicles with a stretched senior financing of EUR 20.5 million.
Project NEXT is an office project development in Munich; the development has the intention to replace the existing use with a new building with an optimized and significant increase in building rights. The property is located in an established commercial location in Munich and is currently fully let to an investment grade company. The stretched senior tranche is secured by subordinated land charges as well as with a guarantee and offers a moderate risk profile with a LTC of less than 55%. It achieves a double-digit IRR. Even in the current market environment, the planned project development benefits from stable demand for modern, flexible and sustainable office space in established locations in Munich.
“We are pleased to be able to arrange and support this attractive transaction together with CV Real Estate, even in a challenging market environment, and to continue to invest in above-average risk/return profiles,” says Guido Gerstner, Head of Real Estate Debt at Prime Capital. “Financing modern and sustainable office space in good locations remains one focus of our financing activities.”
Prime Capital’s real estate financings in recent months have focused on whole loans and subordinated real estate financings, including modern office developments in very attractive locations, residential constructions and retail parks with food-anchored tenants. “The current market development leads to an adjustment towards more conservative lending parameters on our side; at the same time, we continue to observe an increasing demand for alternative financing solutions,” adds Stefan Futschik, Head of Private Debt.
Prime Capital has already received attractive, large-volume financing requests for the year-end business. The planned investment volume is in the low three-digit million range in whole loans and other subordinated financings.
