Global US Real Estate developer and property management company Tishman Speyer has announced they have completed the purchase of the “Tour Pacific” in Europe. The
property is located at the La Défense commercial office complex in Paris, has 570, 000 square feet (52, 000 square metres) and they bought it from Ivanhoé Cambridge, which is the real estate investing arm of Quebec’s Canadian provincial pension fund La Caisse de Depôt.
The acquisition expands Tishman Speyer’s already large portfolio world wide, which now includes 12 buildings in this neighbourhood of Paris alone totaling approximately 4.4 million square feet (415, 000 square metres). Among them is Tour Esplanade, which is directly adjacent to the Tour Pacific. Tour Esplanade is now fully leased to the French government, following the signing of 2012’s largest lease in Paris.
Completed in 1992, the newly acquired Tour Pacific features a 24-story, two-tower design. It is presently approximately 70 percent occupied, primarily by banking group Société Générale, which has a short-term lease expiration. Tishman Speyer will then undertake a full renovation that will include significant sustainability improvements. The firm has emerged as a sustainability leader in France with more than half of its portfolio in that country achieving certified high environmental ratings, including three buildings ranked among France’s top 10.
“We have been looking for opportunities to increase our footprints in major European cities, and Tour Pacific fits very well with the rest our portfolio, ” said Tishman Speyer Co-CEOs Jerry and Rob Speyer. “We look forward to transforming it and offering it to tenants as one of the most desirable business locations in the Paris market.”
The price paid for the property has not been disclosed, though industry insiders indicate the purchase price is understood to be more than Euros 215 million (about US$ 278 million). Financing for the transaction was provided by Helaba Landesbank Hessen-Thüringen and Deutsche Pfandbriefbank. Tishman Speyer bought the property in a joint venture with un-named institutional funds.
The company is also understood to have invested more than Euros 850 million (about US$ 1.1 billion) in equity purchases of real estate in the past three years in Europe, primarily in London, Paris and Frankfurt. Tishman Speyer’s investment focus is generally with office buildings and mixed-use assets in major cities. Most of their recent activity in Europe has been with existing buildings, although the company is also currently developing new buildings in Frankfurt and Paris.
About Tishman Speyer
Tishman Speyer are developers, owners, operators, and asset managers of first class real estate worldwide. Active across North America, Europe, South America and Asia. Tishman Speyer are relied upon by many of the world’s most prestigious corporations to meet their office space needs. As of December 31, 2012, the firm had acquired, developed and/or managed in total a portfolio of over 123 million square feet with a total value of over $63.6 billion since its founding in 1978.
Operating on an international scale the company today has 19 regional offices around the world with over 100 property and project management offices supporting them on four continents.
Tishman Speyer bought the Chrysler Building in 1997 and since 2000 the company has also owned the Rockefeller Centre, of which it had previously purchased a 5% interest in 1995 – and thus became the owner of two New York landmarks simultaneously. Following its usual practice the company restored and refurbished both properties to their former glory upon acquisition, and as a result was able to enhance their leases significantly and ability to throw off greater amounts of cash flow as a result. This is one of the keys to the Tishman Speyer property acquisition formula for existing buildings, and as a result the two properties now remain relevant and fabulous examples of the best in New York commercial buildings in mid-town Manhattan.
Today with its continued push into European markets, which as a continent has been experiencing continued recession in a number of markets outside of Germany, Tishman Speyer are without doubt hoping to work the same kind of magic on their new acquisitions as they rehabilitate properties there and upgrade leases gradually, and also benefit as general markets recover.
About Jerry & Rob Speyer
Jerry Speyer is Chairman and Co-Chief Executive Officer of Tishman Speyer. He is one of the two founding partners of the company, which was formed in 1978 by him and his then father-in-law Robert Tishman (who died in 2010). Robert Tishman had controlled the then publicly listed Tishman Construction Group one of the largest owner-builders in New York at the time, and, when he thought it time to cash-out, his son-in-law helped him to liquidate all its properties and distribute the proceeds to the shareholders.
Today Jerry is 73 years old, and was born in 1940 – a blessing to his parents who had at that time had newly arrived in North America from the old continent. According to a profile provided in an archived New York Times article about him, Jerry Speyer’s mother came from Switzerland and his father from one of the old Jewish families of Frankfurt who had to flee Germany in 1939. So Speyer grew up in a comfortable household on Riverside Drive; graduated from the prestigious private high school Horace Mann School and majored in German literature at Columbia University. He graduated in 1962 and subsequently received an MBA from Columbia Business School in 1964.
Speyer began his business career in 1964 as Assistant to the Vice President of Madison Square Garden before joining the family firm in 1966 as his father-in-law’s assistant, then becoming Vice President and heir-apparent in 1970. Later when he founded Tishman Speyer with his father-in-law Robert Tishman he served as President & CEO of the new company. Today he is also Chairman of the Board and together with his son Rob Speyer, who is now President, they both are Co-CEOs – which designation by the way represents a tremendous compliment and statement of confidence from the father to the son.
Speyer and his first wife separated in 1987. Perhaps that would have marked the end of Tishman Speyer, but the business relationship was, by all accounts, untouched. ”It was about the most decent divorce I’ve ever heard of, ” Bob Tishman said about it later. ”There was no reason in the world to destroy what we built up over 20-something years.” Speyer, meanwhile, subsequently married Katherine Farley an architect in 1991. In addition to three children from his first marriage, he has a daughter from his second.
Jerry Speyer today is Chairman of New York’s Museum of Modern Art and Vice Chairman of the New York Presbyterian Hospital. He is also a former Chairman of the Board of Directors of the Federal Reserve Bank of New York, and has had a large number of other diverse board affiliations.
Jerry Speyer also plays a leading role in New York’s philanthropy, no more visibly than when he played a key role a few years ago in helping organize the expansion of the New York Museum of Modern Art, or “The Modern” to New York insiders, when it expanded to include the building next door in 1994 in a $650 million project new building project. As much as anything else perhaps this sealed his acceptance at the time by “old money” as a member of the very, very exclusive New York club of very, very rich people who behind the scenes basically run the whole city. He has certainly not disappointed them and has continued to manage Tishman Speyer in a manner as discreet as one can for the adventurous kind of business that the real
estate development business remains.
Jerry Speyer’s European lineage without a doubt played a big part in Tishman Speyer’s eventual strategic push into international markets, which is extremely unusual for New York real estate developers who by and large are parochial and local – which in any case is the “usual” essence of real estate activity as real estate value is so site-specific. It takes wide knowledge of the world to feel comfortable putting up major projects around the world, and that clearly Tishman Speyer has benefited from in its strategy and implementation.
Robert Speyer, who is 44, was born in 1969 and like his father was educated at Columbia University where he graduated magna cum laude in 1992. Before joining the family firm he worked as a reporter at the New York Daily News. In 2008, he married Anne-Cecilie Engell (who is of Danish descent) in a nondenominational ceremony.
Also in 2008 Mr. Speyer was named Co-Chief Executive Officer of Tishman Speyer serving in tandem with his father Jerry. Mr. Speyer today serves as chairman of the Real Estate Board of New York. In 2006, he was appointed by New York City Mayor Michael R. Bloomberg to be chair of the Mayor’s Fund to Advance New York City, the city’s not-for-profit corporation. Like his father he serves on the boards of, and is associated with, numerous civic and charitable organizations many of them related one way or another to the welfare of the City of New York which they both love.