IVG Immobilien AG, the German property owner taken over by creditors earlier this month, has started the process of selling a Frankfurt office building that’s the company’s biggest asset, according to two people with knowledge of the deal.
The Squaire, an elongated ship-like office and hotel building next to Frankfurt Airport, is valued at about 800 million euros ($1 billion), said one of the people. Bonn-based IVG is in the process of selecting a broker to manage the sale, said the other person. Both asked not to be named because the sale is private.
IVG, once Germany’s biggest property company by market value, is in the process of restructuring 3.2 billion euros of debt after demand for its buildings fell in the wake of the financial crisis. The company owns about 4 billion euros of office buildings in Europe and manages 12 billion euros of real estate for institutional clients.
In March, IVG’s creditors, which at the time included Cerberus Capital Management LP, Aurelius Capital Management LP and Morgan Stanley (MS:US), approved a debt-for-equity swap and a capital increase, allowing IVG to cut its debt by 2.2 billion euros and delist the existing shares.
That month, IVG also agreed to sell its private investors business, which manages a fund that owns a 50 percent stake in London’s Gherkin tower, to German competitor Zech Group GmbH. The Gherkin, officially called 30 St. Mary Axe, has since been put up for sale.
Tenants at The Squaire, which is two thirds of a kilometer long and 65 meters (213 feet) wide, include Hilton Worldwide Holdings Inc. and KPMG LLP. The nine-story building, completed in 2011 at a cost of more than 1 billion euros, was valued at 807 million euros in IVG’s 2012 annual report, the latest one published.
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