Refinance option prevails over sale of So Ouest office in Paris

La Francaise Real Estate Managers has announced it has worked with Heleba and DekaBank as co-lenders to restructure a loan used to acquire the 33,252 m2 office block that LaFrancais acquired in 2006 for €334 mln on behalf of Korean investors, believed to be fronted by Samsung SRA Asset Management.

Reports emerged in December 2022 that So Ouest had been put on the market with a €300mln-plus price tag. It came at a time of concerns for Korean investors who piled into major real estate deals across Europe several years ago but found themsleves under pressure to refinance at higher rates or potentially take a haircut on sales.

However, almost 12 months on since marketing the office for sale, La Française has said it had successfully negotiated a refinancing through Helaba, the loan agent, and DekaBank, acting as co-lenders of the prime office asset at 35 rue d’Alsace in Levallois-Perret in the northwest of the city.

David Rendall, MD of the international division of La Française REM, said, 'After leasing out 32 000 m2 in So Ouest last year by way of a 12-year lease renewal for around 26 700 m2 signed with SAP (the German software company) and long-term leases for approximately 5 000 m2 with Industrious and Meiyume, this refinancing deal clearly reflects a high level of confidence in our asset management capabilities and the underlying value of the asset.'

Philippe Depoux, president of La Française REM, said, 'In an era of market uncertainties and high interest rates for longer, La Française REM is redefining real estate asset management to attract tenants, reduce vacancies, protect assets and ensure property values.'

La Française was advised by Ashurst on legal aspects and Flusin Miralles Esteve on the notarial aspects.

In 2016, it was reported the SAP HQ had become the second overseas purchase by Samsung Group's financial units since launching a fund involving Samsung Life Insurance Co, Samsung Fire & Marine Insurance Co, Samsung Securities Co, and Samsung SRA Asset Management Co. The fund is managed by Samsung SRA Asset Management.

US disaster
The first purchase it made was of the BMO Harris Bank HQ in Chicago.

In a February 2022 article in Chicago Business, the media outlet said the Chicago office stood to be 'one of the mst dramatic examples of lost value for a downtown office property' during the pandemic. The Real Deal reported in the same month that the office building was set to be sold for a loss, with Union Bank hiring JLL to sell a loan of almost $191 mln.

In August 2022, it was reported that Samsung Life and its lender had lost about $200 mln on the sale - Samsung losing $124 mln and Union Bank losing $70 mln.

Developer entrepreneur Mike Reschke was able to buy the BMO building’s notes for about $120 mln after Samsung struggled to fill space left empty by the exits of BMO Harris and law firm Chapman & Cutler, which accounted for almost the whole property.

 

 

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