Blackstone Group has revived the sale of a circa €500 million Amsterdam office building by adding Eastdil Secured to the two brokers it had earlier appointed.
The US private equity firm appointed CBRE and NL Real Estate in the autumn of 2021 to sell the 48,000-square-metre Tripolis building. By the summer of 2022, Blackstone was in exclusive talks to sell the property to Allianz, but talks were abandoned as the German insurer was preoccupied with selling offices across Europe, as reported.
A sale looked even less likely when months later the main tenant, ride-hailing firm Uber, wanted to sublet 12,000 square metres of space before moving in after originally agreeing to lease 30,000 square metres in the building, as reported. Sublets make investors twitchy as they fear weaker demand long term. The other tenant in Tripolis is law firm De Brauw Blackstone Westbroek, which in 2021 signed a 10-year lease for 18,0000 square metres.
With three brokers on the deal, Blackstone seems determined to get the building off its books. It is willing to talk about vendor finance and deferred payment, according to a market source.
However, the market has changed considerably since Blackstone last tried to sell the property. Deals have dried up due to rising interest rates and investors waiting for further price corrections as a result. When the private equity firm first tried to sell the building, it was assumed it could achieve a 3.5% initial yield. As the property produces €20 million in rent, that would have resulted in a circa €560 million purchase price.
Amsterdam prime office yields have moved out to 3.9% by the end of the first quarter, according to Savills. It quotes an all-in debt rate at five years fixed at 4.28%. Of all major European office markets, Amsterdam had experienced the strongest price correction by the end of the first quarter, with capital values down 33% from a year earlier. Applying a 3.9% yield would result in a €512.8 million purchase price.
Blackstone bought Tripolis from AXA Real Estate for €72.5 million in 2017. It completely redeveloped the property and added extra space to it.
Blackstone declined to comment.