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| La Défense from the East-West Axis |
Another busy day for the half-way point of our trip! This rainy Wednesday morning we took the metro outside of Paris, to
La Défense, the financial district just west of the Arc de Triomphe. We met with
AXA Real Estate, the largest property owner in Europe. AXA is a global operation with 23,000 clients and 1,700 funds. The Global Chief Investment Officer, Dennis Lopez, and his team gave us an overview of two recent deals: a retail project in the south of France and redevelopment of an office tower in La Défense. Both deals were illustrative of differences between the real estate business in the United States and Europe. Agreements between landlord and tenant are negotiated and drawn up in a contract in the US, whereas throughout much of Western Europe the process is highly regulated. The intent is to preserve and implement urban planning initiatives. When a lease expires in France, for example, a tenant is protected by law to remain in the building. If the landlord wishes to evict the tenant, the case must go before a judge and the landlord will have to pay an indemnity to buy back the lease contract.
The team walked us through the redevelopment of the
AXA Tower, originally built in 1974 by the UAP insurance company. In 2001 AXA learned that the current tenant was going to vacate. In 2004 they issued an RFP to 5 architecture firms.
KPF was selected for the project. In 2006, post permits and previous to construction,
Beacon Capital Partners (a Boston based private equity firm) acquired the asset and development facility from AXA, assuming the development and leasing risk. In 2007 the project was launched. It took one year to remove asbestos from the building and three years of construction. The redevelopment added 60 meters in height to the tower and an additional 10,000 square meters of leasable area. AXA has already pre-let space to Ernst & Young.
Tower First, with 52 floors, is poised to become the tallest office building in Paris second only to the Eiffel Tower. We will have a walking tour of
Tower First tomorrow morning with the Project Manager,
Altaréa Cogedim, who is responsible for overseeing the construction.
The employees at AXA were extremely gracious to us and we are grateful that Professor Douvas and Professor Brown arranged this meeting. Professor Schaefer was instrumental in suggesting that AXA's New York team visit MSRED at Columbia next semester. We wrapped up the day eating lunch and speaking with the analysts and associates at the firm. Despite the clouds, we enjoyed a scenic view of the city.
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| Lunch with AXA Real Estate |
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| Tower First from AXA's offices |
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| Lobby in The Tower First |
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| 42nd floor on the Tower First with Eiffel Tower in the background |
The team walked us through the redevelopment of the AXA Tower, originally built in 1974 by the UAP insurance company. In 2001 AXA learned that the current tenant was going to vacate. In 2004 they issued an RFP to 5 architecture firms. KPF was selected for the project. In 2006, post permits and previous to construction, Beacon Capital Partners (a Boston based private equity firm) acquired the asset and development facility from AXA, assuming the development and leasing risk. In 2007 the project was launched. It took one year to remove asbestos from the building and three years of construction. The redevelopment added 60 meters in height to the tower and an additional 10,000 square meters of leasable area. AXA has already pre-let space to Ernst & Young. Tower First, with 52 floors, is poised to become the tallest office building in Paris second only to the Eiffel Tower. We will have a walking tour of Tower First tomorrow morning with the Project Manager, Altaréa Cogedim, who is responsible for overseeing the construction.
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