Deutsche Finance Arrives In US With Yearly $100M To Invest

DENVER–Munich-based Deutsche Finance Group has opened its first US office here with the intention of investing roughly $100 million each year on behalf of its European investors interested in owning direct real estate in the US. The subsidiary is called Deutsche Finance America and it is headed by the former president of Amstar Group Jason Lucas as a shareholder and partner.

The investment strategy will be to pursue value-add and opportunistic investments across all product types. “We are pursuing investments in the top US cities with a keen focus on the major metropolitan markets that have the most user demand and investment liquidity,” Lucas tells GlobeSt.com. The size of the investments can be flexible — anywhere between $10 million to $150 million of equity per transaction, he says. The ideal model will be to set up programmatic platforms to execute on multiple investments with the same joint venture partners.

Deutsche Finance America, in fact, has already closed on its first deal in the US — a partnership with several other equity providers to acquire a stake in the office portion of Manhattan’s Gucci building. Lucas did not work on that particular deal — it came about before his tenure with the firm and was negotiated from Munich.

For that deal “we invested $150 million of equity, which is on the large side for us, but we plan to invest at least $100 million of equity per year and can flex up when we find the right opportunities,” Lucas said. Deutsche Finance Group has many different types of investors, he adds, including a base of over 20,000 retail investors, separate accounts with pension funds and insurance companies as well as large family offices. “This diverse range of capital provides flexibility to pursue investment opportunities that may not be a fit for more traditional real estate investors,” he says.

Deutsche Finance America is looking at more deals in New York, according to Lucas. The firm also wants to be on the West Coast — in the San Francisco and Los Angeles markets — and is also exploring part of the southeastern US.

For the rest of 2018 Lucas plans to focus on closing a few more direct investments, set up at least one programmatic joint venture with a local partner and build up a team of three to four people, who will all be based in Denver.