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FRANKFURT-SITQ has acquired two class A office buildings located in Le International Banking Center in this city’s west zone. The purchase price was $259.1 million (C$300 million).

The buildings’ net rentable area totals about 500,000 sf. Vacancy is currently 11.78%/. Two banks occupy 80% of the building. Deutsche Bank leases 320,000 sf and Degussa Bank, a subsidiary of ING, leases about 70,000 sf. A restaurant leases another 9% of the building. A company source tells GlobeSt.com that the bank leases expire in 2017 and 2019 and the restaurant lease expires in 2024.

“The Frankfurt market is currently at the low point of its cycle due to a broad-based restructuring of its banking sector, and we feel it offers excellent potential for growth,” says Yvon Tessier, SITQ’s senior vice president of investments. “Beyond that, the quality of the tenants and the long-term leases allow us to look at the future with a lot of confidence.”

With 2 million people, Frankfurt is the fifth largest city in Germany and the fourth largest financial center in the world behind London, New York and Tokyo. Frankfurt is home to the European Central Bank, the head offices of 240 German and foreign banks and the largest of Germany’s stock exchanges.

IBC is a 900,000-sf complex developed in 2003 and 2004. Deutsche Bank sold the complex to Blackstone Group in 2003 in a sale-leaseback that included 50 other bank assets totaling about 1.6 million sf.

SITQ is composed of six financial institutions and pension funds. Its principal shareholder, the Caisse de depot et placement du Quebec, is Canada’s leading fund manager. SITQ’s portfolio includes 28 million sf in 116 properties located mainly in the US and Canada.

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