german

BERLIN, GERMANY

Asset Overview

Triangular shaped building that was in the 1980’s owned and occupied by Siemens. The building comprises three wings constructed in three phases from the turn of the century to the 1970s.

Located in Berlin which has a population of c. 3,416,300. The local area is occupied by high quality car showrooms and mixed quality office buildings.

Key Statistics

Floor Area 18,846m2
No. of Tenants 13
Passing Gross Rent per Year €1,220,716
Rent per occupied m2 pa €78
Void Rate 16%

Key Management Issues at Purchase

  • Non-recoverable costs and service charge shortfalls.
  • Lack of clarity regarding settlement of VAT.
  • Prior owners lack of strategy and widely divergent views of potential of the property.
  • Deutsche Bahn the anchor tenant with impending break options.

Rynda’s achievements during assignment

  • Solved a multitude of inherited issues including a catch up of vital capital expenditure and settlement of unpaid bills owed to suppliers which could have led to a financial “meltdown” in the summer 2009.
  • Established a close working relationship with the letting agents resulting in three new tenants for a total of 4,555m2 and €324,696 of rent.
  • Reduced the vacancy rate from 45% to 21% between May 2009 and August 2010
  • Renewed two leases with existing tenants for 1,692m2 and €115,632. Pacified a prior owner who was contemplating legal action for non-payment of service charge reconciliation arrears and secured the reimbursement of property tax.
  • Turned the building into a high quality business centre.
  • Worked out recoverability of service charge despite a lack of service charge reconciliations in 2007 and 2008.
  • Reviewed options to mitigate service charge shortfall to the owner.
  • Developed a process to ensure VAT reclaims and records were complete and accurate so removing significant risks of VAT inspections and penalties in the future.
  • By January 2011 the negative cash flow pre debt service had changed to a positive cash flow post debt service.
  • Sold the asset in August 2011 at €15m.
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