BRUSSELS: NorthStar Realty announced that it has closed the acquisition of a €1.1 billion pan-European office portfolio (the “Portfolio”) that NorthStar Realty entered into an agreement to acquire in 2014. The Portfolio is comprised of 11 Class A office properties located across gateway cities in seven of Europe’s top markets: London, UK; Paris, France; Hamburg, Germany; Milan, Italy; Brussels, Belgium; Amsterdam and Rotterdam, Netherlands; and Gothenburg, Sweden. The Portfolio is approximately 186,000 square meters and benefits from a well-diversified mix of market leading tenants.
NorthStar Realty financed the acquisition with €530 million of seven year senior mortgages, denominated primarily in the local currencies of the respective properties, with a current weighted average interest rate of approximately 1.8%.
NorthStar Realty’s Chairman and Chief Executive Officer, David Hamamoto, commented, “We are extremely pleased to expand NorthStar Realty’s footprint in the European real estate markets with the acquisition of these high-quality properties. We believe our ability to execute on a multi-currency, pan-European acquisition of this size provided us with advantageous pricing that is considerably below the portfolio’s intrinsic value. As evidence, we have received unsolicited bids for portions of this portfolio at significant premiums to our allocated purchase price, including in one instance greater than a 30% premium to our allocated purchase price, representing an approximately 4% cap rate based on in-place NOI.”
David Hamamoto continued, “Furthermore, we are excited about the proposed spin-off of NorthStar Realty’s European business, which will include this portfolio and an additional approximately €450 million portfolio that we expect to close next week. We believe NorthStar Realty Europe Corp. will be positioned for robust growth with a substantial and highly attractive pipeline of investment opportunities.”
