When an affiliate of Cerberus acquired a portfolio of 45 German retail properties in August 2010 for a purchase price of more than €700 million, it was the largest real estate transaction in Germany that year, and one of the country’s most significant property transactions since 2007.
In addition to supplementing Cerberus’s already extensive portfolio of German high street retail properties, this acquisition and leaseback transaction showcases the Firm’s ability to utilize its financial expertise and extensive European real estate experience to benefit investors and tenants alike.
Prior to the acquisition, Cerberus negotiated the exclusive rights to manage the properties, and established a structure for maximizing the real estate assets by:
- Securing a €480 million debt financing package with a consortium of six European banks
- Creating a mutually beneficial leasing agreement with average lease terms for the properties of 16 years
- Negotiating long-term leases with the property’s tenant that limited investors’ exposure to rising property taxes and maintenance expenses
These properties have become particularly attractive due to the strong credit rating of their tenant, Germany’s largest retailer.