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GreenOak in final Spanish deal for first Euro fund

The deal sees the investment period of the firm’s Continental European Private Equity Real Estate Fund draw to a close and comes as it raises first equity for Fund II.

GreenOak Real Estate, the private equity real estate firm headed by former Morgan Stanley Real Estate Investing (MSREI) senior executives, has completed the largest investment on behalf of its first Europe-focused investment fund.

The firm has acquired the Las Mercedes office complex in Madrid from the investment management business of UK insurer Standard Life Investments. Although neither side of the transaction would reveal a sale price for the 845,000 square foot complex, PERE understands the deal is larger than any other made by the firm on behalf of its Continental European Private Equity Real Estate Fund, which was closed on €250 million of equity last summer. Including additional co-investments from the fund’s investors, GreenOak’s equity for the vehicle was closer to €325 million.

It is further understood that, following this transaction and one more investment in Italy, the investment program for GreenOak’s first fund will draw to a close. The investment period for the firm’s second Europe-focused real estate fund began earlier this month. GreenOak has already raised €100 million for its GreenOak Europe Fund II and is thought to have more than another €100 million soft-circled.

The second fund will have a slightly broader focus than the first, which was exclusively focused on investments in Spain and Italy. Fund II may include investments in the UK and the Netherlands as these markets correct following today's Brexit poll result in the former and a prospect EU membership vote in the latter.

Including Las Mercedes, the first vehicle contains 21 investments.

GreenOak declined to comment on its fundraising endeavors, however, John Carrafiell, who leads the business alongside fellow former MSREI leaders Sonny Kalsi and Fred Schmidt, commented on the Las Mercedes transaction. He said: “The acquisition of Las Mercedes Business Park, one of Madrid’s only master-planned office campuses, reflects GreenOak’s strategic focus: core Madrid sub-markets, excellent build quality and well-located assets, which are sought after by tenants.”

“This acquisition is part of our ongoing strategic focus on the Spanish market and is well-timed to capture the surge in occupier demand we see targeting Madrid’s best sub-markets, on the back of rising prime CBD rents.” Las Mercedes is currently home to occupiers including Altran, Applus, the Spanish Medicines Regulatory Agency and Xerox.

JLL and Gleeds acted as advisors in the deal and Clifford Chance provided legal advice to GreenOak.

Since 2012, GreenOak has raised and invested or committed $750 million of equity, acquiring $1.3 billion in assets. Across the US and Asia as well, the firm has raised $4.6 billion of equity for its opportunistic strategies.