LONDON-Well, Stuart Reid ought to know. The Berlin partner of locally based investment advisor Rockspring Property Investment Managers just completed a $369-million refinancing of its German Retail Box Fund.
Now, in the wake of that mega-refi, he shares with GlobeSt.com some thoughts on what German banks are looking for and what the lender needs to bring to the table to get a mortgage deal done. First, he notes, banks, not unlike those stateside, favor retail, residential and industrial. “They’re not so keen on office, unless it is long-let,” he adds.
They’ll also require that the average unexpired term be longer than the loan term. Senior loans will go up to 60% “of German mortgage bank valuation,” he says, “which in itself is about five to 10% below RICS valuation.”
Don’t come with just a nifty property under your arm, Reid warns. It’s not enough to carry the day. He says banks are also looking for a borrower with a track record in that particular sector and market. You’ll also need to prove your asset-management capabilities “if the properties are outside of your core,” and a local management platform.
He certainly came with that to the “club” of five banks that ultimately did the Rockspring fund’s refi. As we reported, the fund, which launched in 2005, has to its name 50 food-anchored retail warehouse parks and supermarkets.
The bulk of this portfolio, more than 95% by value, is in the former West Germany. Prime Management Dusseldorf is the asset manager.