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Eurocastle Buys DB Portfolio for $642M

AMSTERDAM-Eurocastle takes the German office holdings as part of a strategy to beef up by $1.28 billion this year.

By Anita Howarth | Updated on September 07, 2006

AMSTERDAM-Eurocastle Investment Ltd. has agreed to buy a portfolio of six office properties for about euro 500 million ($642.7 million) from DB Real Estate. The buy reflects an initial yield of 5.5%.

The properties are located in Berlin, Frankfurt, Dusseldorf, Wiesbaden, Eschborn and Sulzbach and have an average age of less than 10 years. The holdings total 190,600 sm. The portfolio has stable cash flows with an average lease term of seven years and more than 80% of rents generated from major corporate tenants. An initial occupancy rate of 93% gives an opportunity for future income growth.

Eurocastle is a closed-end investment company that focuses primarily on German commercial real estate assets and real estate-related debt. It is managed by Fortress Investment Group, a global alternative-investment and asset-management firm with more than $23 billion in equity capital currently under management.

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