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GlobeSt.com UPDATE: Eurocastle Details Dresdner Acquisition

NEW YORK CITY-The acquisition makes Eurocastle the largest public company focused on the German real estate market. The 303 properties total 845,516 square meters.

By Barbara Jarvie | Updated on December 22, 2005

NEW YORK CITY-London-based Eurocastle Investment Limited’s $2.4-billion acquisition of the Dresdner portfolio involves 100% of an open-end fund which owns a portfolio of 303 commercial properties for approximately $2.4 billion. The properties are primarily office buildings and are largely occupied by Dresdner. The bank will continue to occupy their current space which represents approximately 80% of rental income on the portfolio, which is 15% vacant.

Eurocastle is externally managed by locally based Fortress Investment Group LLC. The deal makes the firm the largest publicly traded company focused on German real estate. The properties, totaling 845,516 square meters of leasable space, are concentrated in Frankfurt, Hamburg, Munich, Dusseldorf and Berlin. The purchase reflects an unleveraged initial yield of approximately 5%. Eurocastle expects to fund the purchase with equity and debt financing. The debt has been committed to by various banks and the equity will be raised through a public offering of common stock combined with an investment from a private equity fund managed by Fortress.

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