Location and building quality are key drivers of a commercial property valuation. In the case of Hochhaus am Park, there were strong discrepancies between these criteria that needed to be resolved: an excellent location but a building in need of renovation.
New perspectives for Hochhaus am Park
Hochhaus am Park FrankfurtThe property
Hochhaus am Park sits in the most attractive location in Frankfurt's Westend, directly adjacent to the southern part of Grüneburg Park. The building, consisting of two towers with a height of approximately 100 metres, stands on a spacious plot of around 5,500 sqm.
Facts & figures
| Property name | Hochhaus am Park |
|---|---|
| Address | Grüneburgweg 102 in 60323 Frankfurt/Main |
| Submarket | Westend |
| Asset class | Office |
| Year(s) of construction | 1975; 1982-1984 |
| Lettable area | 25,000 sqm (existing property) |
| Risk category | Opportunistic |
| Seller | Goldman Sachs |
| Buyer | Revcap |
| Activities | Sell-side mandate (in combination with AM) |
| Mandate period | 2016 |
The challenge
The building was nearly empty at the time of sale and there were numerous technical and planning issues that needed to be resolved by means of a renovation concept.
Also at the time, there were few players in the German market with sufficient experience in the renovation of older high-rise buildings. Moreover, the office market was still experiencing the aftermath of the Lehman crisis.
The property's need for renovation raised deep technical concerns and made investors cautious. This was because experience in the renovation of older high-rise buildings was lacking in a market which was still preoccupied with the impact of the Lehman crisis. We countered this with a professionally robust concept, working with a renowned architectural practice to achieve professional transparency.
The tools
Map, micro location
Feasibility study including renderings
Map, macro location
Investment Memorandum
The result
Building Value: The positive results from Investment Advisory for Hochhaus am Park
- Despite a detailed and very attractive concept (refurbishment office) with KSP Architects including construction costs, the investors had somehow limited interest
- Strong focus on working out different possibilities for subsequent uses at the location, also in the context of the rental market
- Underpinning the attractiveness of a refurbishment of an existing high-rise building as an opportunity in discussions with various investor groups
- The investor consortium that finally completed the transaction decided to pursue a residential and hotel repositioning of the existing building in order to use the attractiveness of the outstanding location for this project
Our approach opened up a new perspective, which had a positive effect on the sales process: a consortium of investors recognised the excellent location and decided to pursue a future hotel and residential use. This opened up the best prospects for Hochhaus am Park.