acquisition

At the end of the year, the firm, which is externally managed by locally based Fortress Investment Group LLC, inked a deal to acquire 303 primarily office buildings largely occupied by Dresdner Bank. He cited an improving economy and pending REIT legislation as reasons why Eurocastle finds the market so attractive. "Germany is the largest real estate market in Europe, yet there are virtually no public companies owning properties."

Robert Kauffman, head of Fortress's European investment operations, said the firm, which already owns more than 105,000 housing units in the country, has a "strong pipeline of deal flow. This [the Dresdner deal] gives us great foundation to start to gain in Germany in a material way. You'll see a lot of opportunities."

The Dresdner properties, totaling 845,516 square meters of leasable space, are concentrated in Frankfurt, Hamburg, Munich, Dusseldorf and Berlin. They are mostly leased in the long term to the bank, but Eurocastle feels there are opportunities to increasingly stabilize and improve the vacancy situation. Company officials said the "ability to lease up space will have a significant impact on the yield of the portfolio."