OTUS is in charge for a German investor group of a property portfolio with eight locations and more than 20.000sqm lettable area in northern and eastern Germany. All properties are fully leased in the long term and are mainly used by authorities. In addition, OTUS is acting as property manager for a Finnish investor who has purchased is a listed residential and commercial building in the Berlin City-West.

The customer and property growth means for OTUS the further expansion of the management business in Germany. The value of assets under management increased to around € 250 million.

OTUS Immobilienmanagement GmbH faces up to the challenges in the education of students of the real estate industry together with the chair of real estate economics at the University of Applied Sciences. The company offers interested students the opportunity to apply their acquired expertise in practice-oriented bachelor and master theses. Dip. Arch. (FH) Anja Kloohs took this opportunity and chose OTUS as practice partner.

In her bachelor thesis “Value Adding Opportunities in Real Estate Asset Management” Ms Kloohs derived at first theoretically the value-added opportunities in the real estate asset management of commercial property, with the focus on office buildings. Active Real Estate Management is gaining in importance. The increased demands on the return require the consistent development and implementation of value-added real estate strategies and their flexible adaptation on property and portfolio level. For this several success factors, so-called value driver, were highlighted. A selection of these success factors and related measures were then elaborated and verified in the context of a practical example.

Due to the scope of a bachelor thesis, the focus was on sustainable rentability which is inter alia determined by structural substance, costs of use and energy quality. For this purpose OTUS gave Ms Kloohs access to the data of an office building complex in Mannheim, which belongs to an institutional investor’s portfolio and is under management by OTUS.

Along with access to real data the real estate experts at OTUS assisted also with professional advice. OTUS Immobilienmanagement GmbH is looking forward to support more students in the future.

Current developments and challenges in existing and expiring real estate financing were the focus of a workshop initiated by the HYPO EURO and OTUS.

The OTUS managing directors Stephan Pristaff and Bernd Thiele took part in the professional and practice related exchange with representatives of the University of Applied Sciences and the tax and legal practice Squire Sanders Hammonds as well as bank employees. Possible methods and approaches to solve the upcoming problems in asset management and work-out were the main areas of discussion.

Topics of the workshop included crisis tax law for real estate companies from banks’ and investors’ point of view, the possibilities of automation options and quality assurance in real estate valuation as well as the integration of an evaluation tool for efficient asset management. The presentations are available in the download area.

The workshop was used by the participants to look into the expectations of clients and upcoming tasks in financing.

OTUS Immobilienmanagement GmbH is planning to continue the series of events with other banks in the 4th quarter of 2011.

OTUS Immobilienmanagement has won the contract to lease the location “R64-Mannheim” with about 26,000 sqm of office space. The university city of Mannheim is an attractive business location which stands out due to its easily reachable central position and excellent public infrastructure. The office space “R64-Mannheim” creates an ideal environment for businesses of all sizes. In addition to a central location and easy accessibility the possibility of flexible space design and equipment choices enables the implementation of individual requirements. More information as well as surface details and floor plans can be found here.

Despite the recent easing of the general economic environment, the situation on the property market is still tense. Many market participants have to recognise that various factors have a negative effect on the performance of their real estate portfolios and closely correspond with subsidence slope.

Integrated real estate management services including sale and acquisition of distressed real estate assets is one of the main areas of expertise of OTUS Immobilienmanagement GmbH. According to the principle “Back on Track” we offer various market participants individually tailored asset and property management solutions as well as financial consultancy services to effectively implement necessary restructuring and successfully realise the turn around.

Volker Gladis has recently joined the asset management team of OTUS. During his studies of real estate management at the University of Applied Science in Berlin Volker has concentrated on non-performing real estate portfolios, non-performing real estate companies and distressed real estate loans. Based on his bachelor thesis he has now published in collaboration with his former fellow student Benjamin Falk the book “Distressed Investments – Acquisition, Restructuring and Selling of non-performing Assets “. It provides approaches and ideas for dealing with distressed assets from the perspective of various market participants and is published by Logos Verlag (ISBN 978-3-8325-2490-6; at the moment only the German version „Distressed Investments – Erwerb, Restrukturierung und Verkauf Not leidender Assets“ is available).

For more information on distressed assets please see also the talk „Distressed Properties back on track; Challenges – Approaches – Opportunities“ of Stephan Pristaff, Managing Director OTUS Immobilienmanagement GmbH, at the 1. Distressed Asset Roundtable. The talk is available for you in download area.

Together with law firm Hogan Lovells OTUS Immobilienmanagement organised the 1. Distressed Asset Roundtable. The event took place in London on 3 June and was especially addressed to decision makers from banks and insurance companies as well as investors.

The focus of the event was on the German property market that despite the marginal economic recovery can still be characterised by the fact that added value can not be generated through transaction but has to come from the property itself on the basis of an active management.

However some properties find themselves in difficulties through a variety of reasons. These non-performing assets are facing their borrowers and financing bank(s) with complex decisions. How can we bring distressed properties back on track? What approaches and opportunities exist for different market participants? Restructuring of financing or sale? What chances and risks arising from the acquisition of distressed assets?

These and many other questions were discussed in detail in two talks from real estate as well as from legal perspective. In the panel discussion all guests had the opportunity to question possible solutions in greater detail and exchange opinions.

You have questions about distressed assets, are interested in the presentations of the evening or could not participate in the event? Contact us and let us speak about your individual questions.

Many of the Irish investors who spent €1.3bn buying into the German commercial property market in 2007 are now consolidating or restructuring their investments.

Irish investors in German property are faced with three key challenges: securing rental income in order to cover interest and other costs; generating sufficient cash to prevent a fire-sale of solid German investments and thirdly, protecting against any interest-rate increases.

On the plus side, German banks will lend to investors who have a high-quality property, good tenants and a stable cash-flow.

Some banks will provide a loan to value of up to 75pc, charging a competitive bank margin of around 1pc, if the investment meets their lending criteria.

OTUS Immobilienmanagement works together with these Irish investors and takes up the actual and coming challenges to arrange funding for acquisitions, refinancing and interest-rate hedging products.

Please see below some case studies for miscellaneous investors:
“Swaps and Caps” case study:
A private investor took a €6.5m fixed-rate loan to buy a property. We negotiated a variable rate swap, changing from a variable rate to a fixed rate, and thus significantly reducing the investor’s cost of borrowing. We then negotiated an interest-rate cap, to hedge against an increase in variable interest rates.
A cap is a contract between the customer and the issuer where the issuer agrees to compensate the customer should an interest rate exceed a specific level. As this is an insurance product, the buyer pays the issuer an up-front premium for the protection. Our client now pays the three-month Euribor rate, with a 0.75pc margin and a cap of 5.75pc, with this agreement in place until 2018.

Refinancing case study:
An Irish syndicate was coming to the end of its loan term in mid-2011 and wished to extend it on favourable terms. We negotiated with the bank to extend the facility on a fixed-rate interest of around 4pc, out to 2016. As a consequence of the successful refinancing of the loan, the syndicate can distribute some funds to investors. If they hadn’t been able to extend the loan facility they would have had to sell out at the end of the current loan term, at a significant loss.

Repatriation case study:
A tenant wanted to terminate a lease four years ahead of its term. On behalf of the investor landlord we secured a lump sum from the tenant comparable to rent for the four years. This allowed the client to repatriate cash to Ireland with which they paid down mortgages.

This news is also published by Irish Independent.

In May 2009 Stephan Pristaff already has successfully completed the “Final Assessment” of the RICS. After participating in the diploma ceremony in London he can now officially call himself a professional member of the Royal Institution of Chartered Surveyors, MRICS. 

The Royal Institution of Chartered Surveyors (RICS), the principal international property association, has become a mark for ambassador for professionalism, transparency and adherence to ethical principles in all areas of the real estate sector. All members have excellent experience and knowledge of the real estate sector and have committed themselves to a professional practice and a strict code of ethics based on integrity and credibility.

For further information regarding the Royal Institution of Chartered Surveyors (RICS) visit www.rics.org .