Boston-based Taurus Investment, founded by two German brothers who emigrated to the US 30 years ago, has built global property holdings to $2.5bn and is now seeking logistic assets in their native country to serve its select group of private investors.

Guenther Reibling, Taurus COO, focuses on real estate operations, while Lorenz, Taurus chairman and well known in the German and Israeli academic communities, concentrates on fund raising and relations with family offices, small institutions and high net worth individuals for whom the group has consistently earned returns north of 15%. American Peter Merrigan is president and CEO. Tel Aviv-based investment firm Profimex has been a consistent co-investor and partner, helping to channel capital from Israeli private and institutional funds into Taurus’s US and European real estate projects. “It’s a private placement system,” Guenther Reibling told PIE in an interview. “We don’t have public money; we basically raise it either through our clientele, which is in Germany or the United States for the most part, or through Profimex. Profimex is also a very important investor; they are with us on pretty much every project we are doing.”

Value-add to opportunistic in its approach, Taurus exploits different market cycles globally and often invests counter-cyclically, below the public radar. Outside Boston, it has ofiices in Munich, Athens, Buenos Aires, Istanbul, London and Toronto, managing property in the US, Canada, Argentina, Germany, Turkey and Greece. Top of its European real estate shopping list now is German logistics. It is presently acquiring an asset in Gross-Gerau near Frankfurt for some €43m, and lining up similar purchases in and around the German capital Berlin. Reibling, based in Orlando, Florida, wants to build a German logistics portfolio of €300m to €400m in value.

The Gross-Gerau deal completes construction in the next few weeks and is Taurus’s first industrial transaction in Germany. Being developed by the Nextparx group, it comprises 31,000 sq.m. GLA on a property of 56,000 sq.m. and is pre-leased to such firms as Metro, Kühne & Nagel and Lufthansa. The project boasts the first silver industrial sector LEED environment certification in Germany, and will also have a local DGNB certificate. The move to logistics follows significant retail property investment.

Explains Guenther Reibling: “We have three private placements in Germany already, with a total of about 100 specialist store centres and eight Hornbach DIY markets. We bought the first one in Sindelfingen and then seven more throughout Germany, and one in Malmö, Sweden. These were basically triple-net sale leaseback deals. The next step was to start purchasing food-anchored retail centres, and we accumulated about 100 all over Germany.” The assets, ranging in value from €8m to €25m, are typically neighbourhood retail leased by chains such as Rewe, Edeka Aldi, Lidl, or fashion group Kik. “We were ahead of the curve so they were easy to acquire at the time,” he says. Through 2005, Taurus bought on a forward purchase basis but it shut down when the market heated up. “So we had pricing of 2005 and we had the merchandise in 2006 and up to 2008,” he says.

The Reibling brothers waited until 2004 to bring their investment prowess back to the country of their birth. “The reason was that up to the early 2000’s, real estate in Germany was always a tax- driven ,” he told PIE. “Today it’s like the United States, except that the returns here are somewhat lower.” He acknowledges however that the risk of overbuilding is also lower. “In the US you never know what you have. These is always the chance that if a mall or something works very well somebody else will build another one a mile down the road.”

With German holdings now around $800m, and another three projects in the pipeline for around €150m Taurus employs development staff but stays firmly positioned as an investor — with a target return 15% to 25% per annum. “I always say that we are not a watch store, we are watchmakers; not only are we able to sell the watch, we can also take it apart, analyse it and put it back together,” Reibling notes. In addition, it is building a mall plus adjacent office in the Turkish capital Ankara on site purchased in 2007. Taurus has also invested in 1500 hectares of land on the Greek island of Milos, where it is doing preparation for high-end residential, working with Andreas Metaxa, a scion of Greece’s brandy empire.

But opportunities are plentiful elsewhere too. “Right now, I see a lot of interesting product coming in the next couple of years in the United States... coming out of the banks, coming out of special servicers.” Taurus recently earned a tidy return in an investment of Commercial Mortgage Backed Securities soon after the global collapse, using its real estate expertise to assess that the underlying collateral was worth a lot more than the paper’s market value. “The next step right now in the US is to buy either whole mortgages or do mortgage workouts,” he says. “You buy mortgages at a discount from banks or other lenders at a discount, depending on what your opinion is about the risk... In a couple of years there will be a lot of product taken back by the banks and foreclosed, and sooner or later they are going to have to put it in the market.”