Berlin Real Estate Investment Partners

Berlin Real Estate Experts

Portfolio Property-Purchase Date May 18, 2006

 

Property Location: Gaertnerstrasse-Friedrichshain, Berlin 10245 (next to Boxhagener Platz)- a very hip and trendy up-and-coming neighborhood

 

Property Description: Multi-family mixed-use building (24 total units- 23 residential apartments and one commercial unit); 1459.19 square meters (15,107 square feet) built ca. 1909

 

Purchase Price: €925,000 (634 €/square meter; ~US $60 per square foot )

 

Annual Rents: €83,835 (existing “cold” rents), €96,770 fully rented

 

Debt Financing: €810,000 @ 5.09% 10 year fixed (88%) with 2.039% amortization

 

Equity Commitment: €115,000 (12%)

 

*Cap rate (gross rents/price): 9.4% (assuming 2% vacancy rate, 3% annual repairs and 5% management fee costs)

 

·        Operating Costs:  In Germany, Tenants pay their pro-rata share of heating, property taxes,  water, sewer, cleaning and minor upkeep; Owner pays property management expenses (5-6% of gross “cold” rents), debt service and amortization

 

*After-tax return on equity: 25% on purchase price equity alone;

 

  • 14% ( fully loaded, assuming 120,000 Euro renovation/build-out reserve, 3.5% property transfer tax, and 1% notary fee (€277,375  total equity))

 

*Based on achievement of fully rented building which necessitated build-out of commercial space for prospective tenant at ~€30,000 cost; commercial lease commenced August 2007