Deka debt fund buys New York loan tranche from parent bank

Deka Realkredit Klassik, the real estate debt fund owned by DekaBank, has bought a loan secured by a New York office and retail building from its parent organisation.

The fund has bought a $25 million senior tranche of a $580 million loan secured by the 100 West 33^rd Street building in Manhattan.

DekaBank provided the original loan alongside other banks to a subsidiary of Vornado Realty Trust, a listed property firm. US Bank led the financing of the building in which DekaBank and LBBW participated, according to a Commercial Observer article published in July 2015.

The five-year, interest-only loan carried a margin of 1.65 percent over Libor, the article said.

The 11-storey building was completed in 1912 and was extensively renovated in 1990. It is located in the Penn Station submarket of Midtown Manhattan and contains more than 100,000 square metres of space which is almost fully leased to nine office and over 20 retail tenants.

The fund said that the loan was purchased in line with the investment strategy of participating in loans for prime properties in core locations.

Deka Realkredit Klassik was launched in 2009 as the first debt fund established under German investment law. The fund only acquires first ranking tranches of loans for existing commercial real estate. DekaBank commits to holding a subordinate tranche equal to at least 50 percent of the fund’s share for all first ranking tranches purchased by the fund.

Deka Realkredit Klassik had net assets of around €560 million as at 30 June 2016.