HAMBURG-Behringer Harvard Strategic Opportunity Fund II LP made its first acquisition recently, acquiring a 146-unit apartment portfolio here that is fully leased. The portfolio consists of four connected brick buildings that were built in the mid-1900s and renovated within the last 10 years.
Beringer Harvard VP Michael Cohen tells GlobeSt.com the plan is to upgrade units and raise rents as leases expire, and generally hold the asset until 2009, when the complex will be eligible to be sold off as condominiums. Meantime, the company will develop 10 or so luxury condominium units on a contiguous parking lot. That project is expected to break ground in the next three to six months.
Hamburg is Germany's second largest city and Hamburg Harbor is one of th elargets ports in the European Union. The units are in four-story buildings that occupy an entire city block on the commuter rail line in the Barmbek region, about seven kilometers from the city center. The vacancy rate where these units are located is perpetually in the single digits, says Cohen.
Behringer Harvard's partner in the investment is Alexander Knoop, a local developer with a background in apartments, renovations and condo conversions. Cohen says Knoop, a friend of Behringer Harvard president Bob Aisner, contributed equity to the partnership, which then bought the property.
Given the complex is going into a fund with a closed-end time period, Cohen says that depending on where rental rates are going, it's likely the property would be sold to a condo converter rather than converted in-house. Cohen declined to discuss the acquisition price and it could not otherwise be obtained Wednesday morning. The seller was a local partnership of three investors, two of which are Jochen Carlsen and Thomas Kersig.
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