Refinancing of a multi-tenant office portfolio in Groningen

Background

The client had acquired the two office buildings, with a combined gross leasable area of approximately 22,500 m², on a risk basis in 2016 and 2017. The properties were struggling with high vacancy rates, and one of them was in urgent need of modernization. Through active asset management and targeted CAPEX investments, the properties were fully renovated and repositioned, after which they were fully leased and made future-proof. Thanks to the modernization and a strong tenant base, the portfolio has grown into a stable investment.

Both financing arrangements with separate banks had expired. The investor wanted not only to refinance these loans but also to refinance a portion of the invested capital—consisting of shareholder loans—by securing a larger loan than the existing ones. Thanks to the increase in value resulting from the new lease, improved cash flows, and the absence of vacancies, this was entirely possible without increasing the initial LTV.

Asset Partners prepared a detailed business case that emphasized active management, the investments made, and the resulting increase in value. Based on this, a competitive tender was organized among domestic and foreign financiers, including the two existing banks. This resulted in multiple financing proposals for the desired principal amount, on favorable terms.

Ultimately, the client decided to proceed with the refinancing through both existing lenders, with a higher principal amount and improved terms, in order to maintain the relationship. This refinancing allowed the client to realize the appreciation in value and position the portfolio for sustainable long-term growth—a fine example of active real estate management that pays off.

Outcome

• Competitive bidding process involving multiple domestic and foreign investors
• Significantly improved terms from existing lenders
• Higher principal amount achieved without increasing the initial LTV
• Partial reimbursement of invested capital made possible
• Strengthening the investor's long-term position and liquidity