Commercial Magazine

International Investments: Germany

By Jeff Bond

Germany’s investors appeared to lose some interest in the U.S. commercial real estate market in 2021, with Europe’s largest economy falling out of the top five investor countries in the U.S. Germany placed second in 2019 and third in 2020 among foreign sources of capital into America.

Last year, however, Germany fell to sixth place in overall investment at about $2.3 billion, with a yearly decline of 43% in total volume. The country was one of five among the top 25 foreign-investor nations in the U.S. to lower their investment levels in 2021, according to Real Capital Analytics (RCA).
Despite the downturn, Germany still proved to be a real estate power in various areas, making deals on a total of 27 U.S. properties, RCA reported. Some of Germany’s top real estate companies, including Commerz Real, were active in the office-space sector while others focused on the beaten-down retail sector.
One of the year’s highest-profile investments was Commerz Real’s acquisition of 100 Pearl Street (a 968,000-square-foot New York City office tower) for a reported $850 million, or about $900 per square foot. It was one of the largest office deals to take place since the beginning of the COVID-19 pandemic.
The 27-story, full-block building was previously known as 7 Hanover Square and sits in a prime downtown location with unobstructed views on all four sides. The 100 Pearl Street acquisition elevated Commerz Real to 17th place on RCA’s 2021 list of the largest cross-border buyers, and it placed the company second among office buyers in the central business district category.
Jamestown was another German firm that was active in 2021, with its largest deal being the acquisition of Seattle’s Home Plate Center for $251 million. Located a few steps from T-Mobile Park, home of the Seattle Mariners baseball team, the two-building complex is seven stories high and encompasses nearly 342,000 square feet. Tenants include the virtual reality company Oculus and the local NBC affiliate KING-TV.
Another deal of note included Union Investment’s acquisition of two Florida multifamily properties for $226.5 million. The properties have 476 units in total and are located in Flagler Village, a fast-growing Fort Lauderdale submarket.
A few German investment firms took advantage of bargain prices for retail properties to buy a number of choice assets around the U.S. Cara Investment was part of a joint venture that spent $156 million (about $1,155 per square foot) to acquire the 384 Post Street property in Union Square, the center of San Francisco’s luxury retail district. The five-story site totals 135,000 square feet.
Union Investments also dove into the retail sector by buying a top location on Chicago’s posh East Oak Street. The building’s tenants include Chanel, Moncler, and Van Cleef & Arpels.
German companies also were in a selling mood. GLL Real Estate Partners sold three properties and Jamestown offloaded nine, including the Beach Place apartments in Florida for more than $110 million. ●


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