MSREF fund gives up German offices

MSREF VI is finally handing back the keys on a German office portfolio worth around €900m. The Morgan Stanley fund has agreed to sell its equity stake to a special-purpose vehicle set up to buy the properties, which form the security of the €940m Mozart loan, the largest part of the Talisman-7 CMBS.

The deal is subject to certain conditions, including a ruling by the Frankfurt tax authorities on the debt restructuring plan. The arrangement gives the lenders certain economic benefits without holding the property directly. Restructuring began when Hatfield Philips took the loan – which is in breach of its interest cover ratio and matures in January 2012 – into special servicing in April 2010.

In light of the anticipated transfer, Hatfield has extended the stand-still period again, this time until 22 June. The deal was originated in 2007. MSREF has sold some properties from the mainly office portfolio, which originally comprised 107 assets and was  worth €1.2bn. Most recently it sold the Süderstraße 24 building in Hamburg for €10.45m.