Deutsche Finance: CEO Thomas Oliver Müller acquires Transamerica Pyramid in San Francisco

San Francisco – In many countries, the market for small and medium-sized real estate investments has been bought empty. In order to be able to invest nevertheless in real estates, investors lock ever more frequently club deals. Such deals are together accomplished investments of different investors on the property market. For this they bundle their capital and acquire an individual object or a whole portfolio. In this way, they can realize lucrative large-scale projects that could not be financed by them individually.
The Munich-based Deutsche Finance Group also offers such co-investments. The finance group has specialized in institutional private market investments in the areas of real estate, private equity real estate and infrastructure and currently manages assets of around 6.9 billion euros. With offices in Denver, London, Zurich, Luxembourg and Madrid, its asset management teams have access to a large network of institutional market participants in the real estate sector. The declared goal is to offer private investors prime investments with high returns through club deals in various countries. The CEO of the renowned investment house, Thomas Oliver Müller, says: „The prime investments of Deutsche Finance Group are international real estate in extraordinary top locations with potential for value enhancement.“ According to his statement, the focus is on higher returns through the exploitation of market cycles, demand-oriented new construction projects and measures to redevelop and eliminate vacancies.
The financing form club deal has several advantages: The participating investors clarify all detailed questions and make the important decisions on project financing together. The flexibly structured deals offer all participants a high degree of control and involvement in the decision-making processes. The investment strategies can be realized precisely and effectively because the partners pursue the same interests. „Good investment deals are generally only found, however, if they have the right networks in the respective markets and generate partnerships from them“, Müller emphasizes.
At the end of last year, Deutsche Finance Group cited an example of exclusive prime investments in the premium real estate sector. In just three weeks, the finance group was able to close the first institutional club deal for private investors with an equity volume of USD 40 million. The deal involved a laboratory and office building with a gross floor space of around 36,200 square meters, 250 underground parking spaces and 4,000 square meters of green space. The property is located in Somerville, Massachusetts, in the scientific capital Boston. The club deal with a term of three years and a forecast capital repayment of 140 percent was reserved within four days after the start of sales, with over USD 96 million. Theodor Randelshofer, Chairman and Managing Director of Deutsche Finance Solution GmbH, commented: „With the first institutional club deal for private investors we are launching a new product segment. We are delighted with this placement success and would like to thank our investors and sales partners.“
Deutsche-Finance boss Thomas Oliver Müller repeatedly points out that many institutional investors from the USA invest in Europe and vice versa German investors want to enter the US real estate market. In order to initiate co-investments, Deutsche Finance is present with its asset management teams in Europe, the USA and Asia. One example of this is the change of ownership of Transamerica Pyramid. At the end of October 2020, various media reported that the San Francisco landmark was sold to Michael Shvo and the investment company Deutsche Finance America for USD 650 million. Shvo is a real estate investor based in New York City and CEO of the real estate developer of the same name, SHVO. Deutsche Finance America, based in Denver, is the American private equity platform for real estate of Deutsche Finance Group. Its mission is to incorporate U.S. real estate into international value creation strategies in order to generate high returns for investors. Deutsche Finance America and Shvo have acquired the Transamerica Pyramid building complex for an institutional joint venture with the Bayerische Versorgungskammer (BVK).
The German pension giant, as a public-law pension group in Germany, operates the business of twelve professional and municipal pension institutions. The core task of BVK, in addition to looking after the 2.4 million insured persons and pension recipients, is the high-yield investment of assets for its pension institutions. The Bavarian Pension Chamber generates five billion euros in annual contribution and pay-as-you-go income and makes 3.6 billion euros in annual pension payments. BVK manages a capital investment volume of 81.7 billion euros for all its institutions.
With 48 floors at a height of 260 meters and its extraordinary architecture, the Transamerica Pyramid occupies a special position among San Francisco’s buildings. The pyramid-like building was one of the first skyscrapers in the city and was built earthquake-proof between 1969 and 1972. On the top floor is a conference room with a magnificent 360-degree view of the San Francisco Bay. The top rises almost 64 meters above the top floor and is brightly lit at night. For a long time, the property was the headquarters of the American financial services company Transamerica Corporation, which also gave the building its name. In 1999, the high-rise, which was designed by architect William Pereira, became the property of the Dutch insurance group Aegon. Now the insurance company has resold the top property, which includes the pyramid itself, two office buildings and another piece of land.
The $650 million real estate deal between Shvo and Deutsche Finance America is being called by the media the largest commercial transaction in the US since the outbreak of the Covid-19 pandemic. Michael Shvo commented confidently: „It’s a classic building for all time that mirrors the forward-looking spirit of the Bay Area. We’re thrilled to bring this property into its next renaissance.“ The building is to be thoroughly renovated without losing its unique features. According to a report in the business magazine „Forbes“, the Transamerica Pyramid was available for purchase since mid-2019: „The tower had been on the market since August 2019. The winning bid, which previously stood at $711 million, was first reported in February, though the pandemic seemingly delayed the closing process and contributed to the $61 million price cut, due to turbulence in the commercial real estate market.“ Deutsche Finance America and Shvo have recently been on a targeted shopping spree and have spent billions of dollars over the past two years on the acquisition of nine properties. That includes Big Red in Chicago (for $376 million), the Raleigh Hotel in Miami ($103 million) and 9200 Wilshire Boulevard in Beverly Hills ($130 million).
However, Deutsche Finance Group and its American subsidiary do not limit themselves to individual financial products. Rather, they pursue a holistic strategy that combines asset management, fund management, risk management, market research, sales coordination, investment brokerage and investor management.