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The Episo 3 opportunity fund advised by Tristan Capital Partners has acquired two office buildings in Berlin for an undisclosed amount.

Everest Capital represented the vendor on the disposal which was administered on behalf of Cornerstone Titan Europe’s commercial mortgage backed securities (CMBS).

The price tag came to around €40 mln, according to well-informed sources. Both Tristan and the vendor declined to comment.

Episo 3 (European Property Investors Special Opportunities) purchased Jannowitz Center, a 32,750 m2 office building in Berlin Mitte and Die Welle, a 14,900 m2 office building in Berlin Lichtenberg, a district east of the city centre.

'This is the second investment for Episo 3 and we see great potential in creating value in line with the strategy of delivering attractive returns,' said Ali Otmar, managing director, investments at Tristan Capital.

Tristan believes the lack of new developments combined with the overall strong economic development in Germany make Berlin offices an attractive asset class in the medium term. 'This is the second office investment in Berlin for Tristan managed funds after the predecessor of Episo 3 acquired Treptowers in August 2011,' Otmar added.

Jannowitz Center was constructed in 1997 and is located on the bank of the River Spree opposite the Chinese Embassy in the prime Berlin Mitte district. The largest tenant is the planning department of the Federal State of Berlin.

The 14,900 m2 Die Welle was built in 1995 in the residential district of Berlin Lichtenberg and is almost completely vacant following the expiry of a lease with the national railway company, Deutsche Bahn.

Otmar added that Tristan Capital 'is exploring a range of possibilities for Die Welle including its immediate disposition to a third party'. 'Die Welle offers an attractive opportunity to be repositioned as an affordable alternative for occupiers deterred by the escalation of rents in central Berlin or converted for residential use,' he said.

Episo 3 and Tristan have selected Pamera Asset Management as asset manager for both properties. Taylor Wessing was legal advisor to the purchaser and Appelhagen acted as legal advisor to the seller.

In December Tristan Capital raised over €170 mln of investment from institutions in the initial closing of Episo 3’s fund raising. It is targeting €750 mln to deploy on value-add investments and distressed opportunities.