BGP Investments is refinancing a significant portion of its German residential real estate portfolio with a €406 million securitized loan, the firm announced yesterday. Deutsche Bank acted as an arranger on the CMBS, with JPMorgan serving as co-lead manager.
Bloomberg reported that BGP had hired Deutsche Bank in August. The firm cited a favorable interest rate environment and the quality of its collateral as critical to its decision to refinance.
The refinancing covers approximately 60 percent of the €1 billion real estate portfolio managed by BGP Asset Management, according to a statement. The refinanced portion of the portfolio includes approximately 10,000 residential units, most of which are located in Berlin, Kiel and the Cologne-Düsseldorf region.
“The additional funds for the financing allow us to further progress the active asset management of the portfolio and, by making additional investments in certain properties, to sustainably enhance the quality and value of the portfolio,” said managing director Till Schmiedeknecht in a statement.
The securitized loan will allow BGP to refinance an existing securitization and smaller bank loans. The refinancing also will allow for the disposal of its holdings in smaller, secondary locations. “Properties suffering from inefficiencies due to their location or their cooperative ownership structure can be disposed to enhance focus and improve returns,” Schmiedeknecht added in the statement.
Founded in 2009, BGP Asset Management was formed to stabilize the residential portfolio managed by BGP Investments. A spokesperson for BGP had not responded to a request for comment at press time.