Germany’s largest office building, The Squaire at Frankfurt airport, is to be refinanced via a new CMBS.
Bank of America Merrill Lynch has launched a €473 mln securitisation of a €548 mln senior loan it made last year against the 145,000 m2 property above the airport’s train station.
The information about the six-tranche Taurus 2021-3 DEU CMBS, the bank’s third so far this year, includes a valuation below the price last paid for the asset.
The CMBS has an expected maturity date of December 2024 and a six-year tail period to 2030 final maturity. As per risk retention regulations, the bank will retain at least 5% of the €548 mln senior loan which represents a 65.8% loan-to-value based on a valuation of €832.6 mln.
The deal reveals that the latest valuation is roughly 11% lower than the price thought to have been last paid for the building in December 2019: that was believed to have been in the region of €930 mln.
A consortium of international investors led by AGC Equity Partners, and including Hana Financial of South Korea, bought the complex from Blackstone’s OfficeFirst.
Current occupancy is 96%, but The Squaire also includes two hotels where, according to rating agency Moody’s, the rent fell last year from €21.6 mln to €4.6 mln due to the trading problems caused by Covid-19.
Moody’s said that the office space, let principally to KPMG and Lufthansa, has generated enough cashflow to service the loan. Lufthansa’s lease is due to expire next year.
BAML’s other two CMBS deals this year are: Taurus 2021-1 UK, a £340 mln securitisation of a loan backed by Blackstone-Mileway’s ‘United V’ UK last mile logistics portfolio of assets bought last year; and Taurus 2021-2 SP, which at €132.9 mln is a smaller deal, secured on the secondary office portfolio owned by Starwood in greater Madrid.
Taurus 2021-1 UK successfully sold after being heavily oversubscribed, with the higher leverage tranche D oversubcribed 9.3 x.
The Squaire was originally developed by IVG during 2006-2011, over-running its budget and contributing to IVG’s collapse. A previous loan was securitised by BAML in May 2015 when the asset was valued at €644 mln.
