ADDRESS | UNITS | FLOOR SPACE |
|---|---|---|
DANZIGER STR. 142, BERLIN | 49 | 2822 m² |
PURCHASE DATE | SALE DATE | PURCHASE PRICE | SALE PRICE | REALIZED RETURN |
|---|---|---|---|---|
12/2013 | 07/2016 | EUR 5.000.000 | EUR 7.865.000 | 57% |
Past performance and statements regarding earnings are no guarantee of future results.
Realized return
DANZIGER STR. 142, BERLIN | |
|---|---|
Units | 49 |
Floor Space | 2822 m² |
Purchase Date | 12/2013 |
Sale Date | 07/2016 |
Purchase price | EUR 5.000.000 |
Sale Price | EUR 7.865.000 |
Realized Return | 57% |
Why we invested
Danziger Straße is a well-known thoroughfare (and Bundesstraße 96) that runs through one of Berlin’s most sought-after neighborhoods, Prenzlauer Berg.
With an oulook at the famous TV Tower at Alexanderplatz, we were offered an ensemble of 50 apartments and a retail store in a new building and a typical Berlin garden house with corresponding side wings in this then and still popular trendy district.
Opportunities and challenges
- Since 2012, prices had already risen rapidly in this location. Due to the city’s continued growth, we were aware that massive value increases were still possible here almost on a monthly basis.
- The previous owner had managed both the property and the rentals in a state of disarray that we had never seen before. The mailboxes were partly misused as fictitious addresses for criminal activities, conflicts smoldered even among the tenants, and garbage from all possible tenants accumulated in the courtyard.
- Some tenants had not paid rent in a long time and were under the impression that they could continue this practice.
- The two-decade-old, moderately constructed new building suffered from moisture damage, both on the façade and in the basement.
The property presented a significant challenge due to its neglected state, tenant problems, and structural issues. However, its prime location in a popular district with strong market growth potential offered the prospect of substantial value appreciation through renovation and professional management.
Results
A Tale of Speed and Targeted Marketing
This project’s success hinged on a strategic combination of swift execution and targeted marketing. While our rental consulting team navigated legal and financial aspects, handled tenant terminations, and resolved conflicts, we simultaneously coordinated with various trades to renovate the building and vacant apartments as quickly as possible.
We ventured into uncharted marketing territory, directing traffic from major real estate portals to a custom-designed website featuring detailed property descriptions, floor plans, and continuously updated photographs.
This strategy revealed a significant demand from West Germans and Europeans seeking homes for job relocations or their adult children. These out-of-towners, drawn by the prime location and first-occupancy status, were willing to make pricing concessions.
As a result of our synchronized efforts, the time between completion, listing, and buyer reservation was reduced to a remarkable 10-14 days.
The installation of additional balconies on the historic garden house undoubtedly represented the most challenging phase of the entire project. The approval process alone proved to be extremely complex and time-consuming. For the actual installation of the balconies, it was essential to have Danziger Strasse temporarily closed.
This was necessary as the components had to be lifted over the front building using a crane. Since Danziger Strasse is a federal highway, approval for the measure lay not with the local authority but with the responsible state authority.
Despite an additional investment of approximately half a million euros, within 18 months, we not only established a vibrant, international community of residents from countries like France, Sweden or Italy, but also achieved a near doubling of the investment. Moreover, we left behind a transformed piece of Berlin.
