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. Last Updated: 07/27/2016

CSFB Puts Its Office Up for Sale

For MTCredit Suisse First Boston is offering 11 Gogolevksy Bulvar for more than $30 million.
Credit Suisse First Boston is selling one of Moscow's prime office buildings, 11 Gogolevsky Bulvar, for more than $30 million.

Michael Lange, managing director at Jones Lang LaSalle, which is acting on CSFB's behalf, said the centrally located building near the Christ the Savior Cathedral would likely be sold to one of the real estate investment funds considering entering the Russian market.

"This is the sort of building that funds looking at Russia are interested in," Lange said. "We have approached 450 investors in the United States, Europe, the Middle East and Asia but also local investors, including private equity funds."

The funds want at least part of their portfolios to be in top office buildings with reputable tenants, a requirement that the CSFB building meets, he said.

Maxim Kunin, director of investment services at Noble Gibbons, the local affiliate of CB Richard Ellis, agreed. He said fewer than 30 buildings are suitable for investment in Moscow and very few, including the CSFB building and the Ericsson building, which Noble Gibbons is marketing as a sale and leaseback, are on the open market.

Lange said the asking price for the CSFB building is upward of $30 million. The building generates about $3.95 million in annual net income, or a yield of about 13 percent. The building has about 8,000 square meters of leasable space and two levels of underground parking covering about 2,200 square meters.

The nine-story building's tenants include accounting firm KPMG, General Motors, the International Monetary Fund and Delta Air Lines, and the building, constructed by Italian company Codest, meets international standards, he said.

"CSFB came in at a very early stage and got involved in the project management side of things. They brought in project management teams from the United States and London to assure the overall quality," said Lange, who declined to reveal the building's final construction cost.

Construction started in 1996, but in 1998, the year of the financial crisis, CSFB decided to stay at its Nikitsky Pereulok premises and to lease, rather than occupy, the building, Lange said.

Max Hosford, director of operations for Hines, which is the property manager for the CSFB and Ducat II buildings, said he would classify 11 Gogolevsky Bulvar as one of the top properties in Moscow.