Denver-based Amstar has acquired Zlota 44, a luxury residential tower currently under construction in the city center of Warsaw, Poland in an off-market transaction for US$83 million, despite building costs of over US$200 million. The seller, Luxembourg-based Orco Property Group, has had financial problems for many years and was unable to complete the project. Amstar will partner with Warsaw-based developer BBI Development to finish the “90% completed” tower and prepare its 266 residential units for sale.
Designed by renowned, Polish-born architect, Daniel Libeskind, the 52-story (192 meter) property is the tallest residential tower in the European Union. It’s located next to the Palace of Culture and Science, the tallest building in Poland. Orco Property Group broke ground on the project in 2007 but due to the developer’s financial problems, construction was put on hold in 2009. Construction resumed in January 2011 and the building was topped out in February 2012. About 20% of the units have been sold.
In December 2013, Orco fired Inso, the general contractor, prior to completion and announced its intention to sell the development.
The acquisition marks Amstar’s first investment into Poland, driven by both the market and investment opportunity. According to Amstar Global Advisers President, Jason Lucas, “Amstar has been monitoring the Polish market for several years due to the country’s well-balanced growth and economic stability. The off-market acquisition of Zlota 44 was the ideal opportunity to acquire a high-quality project at a significant discount to replacement cost. We look forward to applying our hands-on development capabilities to complete the project and believe our efforts will establish Zlota 44 as the preeminent residential address in Poland.”
When finished, Zlota 44 will offer residents open living spaces with floor-to-ceiling windows and panoramic views of the city along with five-star amenities including a fitness club, 25-meter swimming pool, cinema, business center, and wine cellar.
Architect Danile Libeskind commented, “Zlota 44 is a project close to my heart and it has been a true honor to build in my home country. I am confident that the new investors will bring revived energy to successfully complete this project, which has already become a symbol for the future of Warsaw.”
Amstar Vice President Jeff Stonger will manage the project based in Warsaw, with additional support from Amstar’s offices in London, Kiev, Istanbul and Denver. “With all of Amstar’s international development projects, we strive to have a strong in-country team in place to achieve best execution and enable a more direct, working relationship with our local partners. Having Mr. Stonger in Poland will allow us to expand our platform in the region,” explains Lucas.
“Złota 44 is a great challenge for us, but we are confident that our joint expertise in handling such projects, as well as the financial stability we provide, will allow us to bring to life this eponymous project,” added Michał Skotnicki, CEO of BBI.
Amstar and BBI will begin finishing construction of the project in the first quarter of 2015 and anticipate completion in 2016.