Blackstone Announces Plans to Modernize Düsseldorf’s Deutsch-Japanisches Center

London, an affiliate of Blackstone Real Estate Advisors purchased the Deutsch-Japanisches Center (“DJC”) from a consortium of Japanese shareholders. DJC is a mixed-use complex in Düsseldorf, Germany, consisting of a 301-room Nikko Hotel, a 142,300 sq.ft. office building, and a 550-car underground parking facility. Key aspects of Blackstone’s strategy for DJC will include a $6 million modernization and refurbishment program, office tenancy restructuring, and hotel operational cost savings.

Düsseldorf is one of the main business and cultural centers of the Rhein/Ruhr region, the most densely populated area in Europe. It serves as headquarters to several major global companies and is a major international trade fair destination. The Deutsch-Japanisches Center is located close to Düsseldorf’s banking and financial district and to the city’s principal shopping area.

Blackstone made the acquisition in a joint venture with Event Hotels, a Cologne, Germany-based hotel owner/operator with a portfolio of 15 properties located throughout Germany. Immediately upon closing, Event took over the management of the property, and the existing management contract with Japan Airlines, parent of Nikko Hotels International, was converted into a short-term franchise agreement. It is intended that the Blackstone/Event joint venture will continue to seek acquisition opportunities similar to DJC including undermanaged, undercapitalized, and underperforming properties in German-speaking markets.

“Although we have been significant investors in European real estate for many years, we are particularly excited to be entering the German market for the first time with this attractive transaction. We acquired the property at a significant discount to replacement cost which will allow us to invest a substantial amount for modernization. On completion of the modernization the property will have the best business hotel in the greater Düsseldorf area with the most extensive and modern meeting facilities,” said Chad Pike, Senior Managing Director and Head of Blackstone’s European Real Estate group. He added: “We are delighted to be entering into a new joint venture with Event Hotels, which we expect to yield several further attractive acquisition opportunities. The joint venture will target German corporations and insurance companies with non-core hotel assets, banks with subperforming hotel loans, and private owners of large hotel assets with renovation needs.”