The “Deka Realkredit Klassik” debt fund has amassed more than $600 million (USD) in net assets as it continues its strategy of purchasing the first position tranches tied to DekaBank’s existing commercial real estate loans.
The fund has most recently acquired the senior $30 million tranche of a $71 million loan that DekaBank provided in 2015 to refinance the Wedbush Center office property in Los Angeles. The fund, launched in 2009, acquires first ranking tranches of loans made by DekaBank, while the bank retains a subordinate tranche equal to at least 50 per cent of the fund’s share.
The $71 million loan from Dekabank was completed in May of 2015 and refinanced the previous first mortgage acquisition loan of the same amount provided to the buyer of the property, Lincoln Properties, in April of 2012.
DekaBank said in a statement that “the loan interest service is sustainable and the loan-to-value ratio is low,” which “reflects the conservative investment strategy of Deka Realkredit Klassik.” Indeed, based on the $132 million acquisition price of the property, the original debt DekaBank placed carried a loan-to-value of just around 54 percent.
The 21-story, 477,000 sq ft Wedbush Center, built in 1986, is located on the western edge of the downtown Los Angeles financial district and was awarded the LEED Silver certification from the US Green Building Council. It features 584 parking places.
Just this week Real Estate Capital also reported that DekaBank has completed the $300 million refinancing of Vornado Realty Trust’s nearly 1 million sq ft One Park Avenue office building in Manhattan. It was not immediately clear if the Deka debt fund would participate in this deal, as DekaBank did not respond to requests for comment in time for publication.
Deka Realkredit Klassik was the first debt fund established under German investment law. DekaBank noted that the independent rating agency Scope awarded the fund a AA+ rating, meaning “very good.”
DekaBank is the Wertpapierhaus (Provider of Asset Management and Capital Market Solutions) of the German Savings Banks Finance Group. Together with its subsidiaries it forms the Deka Group, which has total customer assets of around EUR 232 billion (as of 30 September 2015) and about four million securities accounts, making it one of the largest securities services providers in Germany.