Windermere X - Bridge Loan Presentation 28 January 2014 Hatfield Philips International 25 Canada Square 34 th Floor London E14 5LB
TABLE OF CONTENTS Executive Summary Summary of Steps Following the Payment Default Asset Overview 2013 Valuation and Portfolio Cashflow Pages 3-4 Page 5 Pages 6-11 Page 12 HPI WINDERMERE X BRIDGE LOAN 2
DEAL/LOAN OVERVIEW Windermere X - Loan Level Breakdown: Loan Current Balance ( ) Outstanding balance # Property Transfer Valuation Location Maturity Loan Status as % of Total Properties Type Date ( ) Date LTV Occupancy Built 3,961,369 0.5% 2 Germany Retail Jan-2011 In Special Oct-2011 3,480,000 Jun-2013 113.8% 98.8% Enel Tower 43,900,000 5.8% 1 Italy Office Jan-2014 Primary N/A 32,700,000 Jun-2013 134.3% 100.0% Lightning Dutch 14,842,500 2.0% 1 Netherlands Retail Aug-2013 In Special Oct-2012 17,290,000 Aug-2012 85.8% 84.9% Tour Esplanade 257,000,000 34.1% 1 France Office Oct-2016 Primary N/A 313,900,000 Jun-2011 81.9% 100.0% Bridge 340,140,968 45.1% 6 Germany Office Jan-2014 In Special Jan-2014 325,000,000 Sep-2013 104.7% 98.2% Tresforte 35,014,421 4.6% 11 Netherlands Office Jan-2010 In Special Jan-2010 19,760,000 Aug-2012 177.2% 55.4% IFB and Pavia 59,639,015 7.9% 5 Italy Office Jan-2014 Primary N/A 47,120,000 Jun-2013 126.6% 95.0% Total 754,498,274 27 759,250,000 Amount in Euro ( ) As of Q4 2013 Bridge Loan Senior / Junior Breakdown: Loan Amount Bridge Loan 370,410,968 340,410,968 30,000,000 325,000,000 Sep-2013 104.7% 114.0% 27,483,304 98.2% 5.1 Total 370,410,968 325,000,000 Amount in Euro ( ) As of Q4 2013 IPD Current Balance Senior Junior Valuation Date LTV Senior LTV Junior Rent p.a. Occupancy WALL in years HPI WINDERMERE X BRIDGE LOAN 3
PRE-TRANSFER TIMELINE OF EVENTS September - October 2013: Borrower indicates inability to refinance at maturity Initial Extension Request with a Business Plan envisaging a 3 year extension Servicer Engaged Real Estate and Legal Advisors October - November 2013: Comprehensive valuation and investment strategy report completed Conducted an extensive review of the Business Plan against the investment strategy report to investigate alternative scenarios in order to implement an exit strategy Analyse the legal aspects of consensual and non-consensual options for enhanced control and security November 2013 - January 2014: Detailed term sheet for loan restructuring and disposal plan discussed with the Borrower. Key terms: Equity injection Incentive-driven disposal fee and market-aligned asset management fee Management and disposal plan Despite extensive negotiations, the Sponsor confirmed that no new equity would have been funded in the Borrowers The Sponsor-related Asset Manager did not agree to back-end any portion of their management fee, making it impossible to incentivize an orderly disposal process Therefore the Servicer terminated the consensual discussion on a long-term extension HPI WINDERMERE X BRIDGE LOAN 4
POST-TRANSFER TIMELINE OF EVENTS 15 January 2014: Event of Default Letter to the Borrowers regarding the Non-Payment at Maturity. Notice to the Junior Lenders regarding their cure rights and purchase option Notification to the Securitisation Parties regarding the transfer to Special Servicing 16 January 2014: RIS notice regarding the Payment Default and transfer to Special Servicing 17 January 2014: Replacement of Borrower s management with new directors provided by corporate service provider replacement completed promptly in accordance with the Servicing Standard to remove the risk of the Bridge Borrowers filing for insolvency 20 January 2014: Two Dutch Stichtings incorporated 23/24 January 2014: Appropriation of the shares by the two Stichtings Standstill agreement executed with new directors January 2014 onwards: The Special Servicer is initiating strategies with the new directors for the management and disposal of the properties and repayment of the loan HPI WINDERMERE X BRIDGE LOAN 5
ASSET OVERVIEW Property Alt Moabit 91, 94-97, 10559 Berlin Status as per latest Valuation Lettable Area 48,074 sqm Asset Type Office Leasing Profile Multilet Lease Expiry Date Various Location Berlin, Germany Annualized GRI 5,630,877 Vacancy 8.8% WALL 3.10 years Strategy The property has approximately 100 tenants and it is let on short/medium-term leases Approximately 10% of the area currently let is under discussion for renewal The Business Plan is to maintain the income profile and the current level of occupancy The expected exit is before year-end 2014 HPI WINDERMERE X BRIDGE LOAN 6
ASSET OVERVIEW Property Kaiserswerther Str. 117-119, 40474 Düsseldorf Status as per latest Valuation Lettable Area 11,953 sqm Asset Type Office Leasing Profile Multi-let Lease Expiry Date Various Location Düsseldorf, Germany Annualized GRI 2,151,419 Vacancy 10.9% WALL 3.5 years Strategy The property has approximately 25 tenants and it is let on short/medium-term leases Approximately 20% of the area currently let is under discussion for renewal The Business Plan is to maintain the income profile and the current level of occupancy The expected exit is before year-end 2014 HPI WINDERMERE X BRIDGE LOAN 7
ASSET OVERVIEW Property Galluspark, 60326 Frankfurt Status as per latest Valuation Lettable Area 44,281 sqm Asset Type Office Leasing Profile Single-let* Lease Expiry Date 31/12/2024 Location Frankfurt, Germany Annualized GRI 5,090,104 Vacancy 0.2% WALL 11.3 years Strategy The current lease agreement was extended in early 2011 The property is fully let to a single credit tenant (Deutsche Bahn) The Business Plan is to dispose of the asset as-is The expected exit is before year-end 2014 *1,300 sqm of canteen and retail space separately let HPI WINDERMERE X BRIDGE LOAN 8
ASSET OVERVIEW Property Am Unisys -Park 1, 65843 Sulzbach Status as per latest Valuation Lettable Area 17,282 sqm Asset Type Office Leasing Profile Single-let Lease Expiry Date 31/12/2022 Location Sulzbach, Germany Annualized GRI 1,778,283 Vacancy 0.0% WALL 9.3 years Strategy The current lease agreement was extended in the second half of 2012 The property is fully let to a single credit tenant (Clariant) The Business Plan is to dispose of the asset as-is The expected exit is before year-end 2014 HPI WINDERMERE X BRIDGE LOAN 9
ASSET OVERVIEW Property Abraham Lincoln Park 1, 65189 Wiesbaden Status as per latest Valuation Lettable Area 29,740 sqm Asset Type Office Leasing Profile Single-let Lease Expiry Date 31/03/2017 Location Wiesbaden, Germany Annualized GRI 5,592,295 Vacancy 0.0% WALL 3.6 years Strategy The current tenant is utilising circa 60% of the property and 15% is sub-let The current lease agreement is set to expire in March 2017, however both tenants are willing to enter into early negotiations for lease extensions The Business Plan is to stabilise the asset prior to sale The expected exit is before year-end 2015 HPI WINDERMERE X BRIDGE LOAN 10
ASSET OVERVIEW Property Alfred-Herrhausen-Allee 1, 65760 Eschborn Status as per latest Valuation Lettable Area 40,223 sqm Asset Type Office Leasing Profile Single-let Lease Expiry Date 30/09/2017 Location Eschborn, Germany Annualized GRI 7,240,326 Vacancy 0% WALL 4.1 years Strategy The sole tenant will vacate the property The current letting market in Eschborn is challenging, with a vacancy rate of 19.7% as of Q3 2013 The Business Plan is to determine potential opportunities to stabilise the asset prior to sale The expected exit depends on the ability to re-let the property HPI WINDERMERE X BRIDGE LOAN 11
2013 VALUATION: Full RICS Red Book standards valuation reporting Market Value on the basis of full site visits and access to all relevant information No special assumptions applied The valuer has not made any investigations into structural integrity of the buildings and assumes that there are no environmental issues which could negatively affect the value Market comparables Frankfurt: In-place office rent equates to 9.12 psm/mth The market rent is 10 psm. Secondary location which does not compare to prime CBD where the prime rent is 36.50 psm Lease break dates and lease expiries table: Expiring before 2014 2015 2016 2017 2018 2019 2020 and after Rolling Berlin 16% 13% 32% 18% 8% 3% 5% 5% Düsseldorf 20% 12% 12% 12% 9% 28% 4% 3% Eschborn 0% 0% 0% 100% 0% 0% 0% 0% Frankfurt/Main 0% 0% 0% 0% 0% 0% 100% 0% Sulzbach 0% 0% 0% 0% 0% 0% 100% 0% Wiesbaden 0% 0% 0% 100% 0% 0% 0% 0% PORTFOLIO CASHFLOW: Historical excess cash available from properties after interest payment and before capex/tis apx. 8M per annum Historical capex/tis apx. 1.5M per annum HPI WINDERMERE X BRIDGE LOAN 12