Blackstone consortium buys Eurohypo US loan portfolio

The New York-based private equity giant has teamed up with US Bancorp and Wells Fargo to purchase a portfolio of US property loans valued at $760 million from Eurohypo.

A consortium consisting of The Blackstone Group, US Bancorp and Wells Fargo Bank has purchased a portfolio of a US property loans valued at $760 million from Eurohypo.

Blackstone, US Bancorp and Wells Fargo purchased the 13 performing floating-rate loans for a collective price of approximately $722 million, or about 95 cents on the dollar. Although Blackstone declined to comment, one source told PERE that the New York-based private equity giant made this purchase on behalf of its Blackstone Real Estate Debt Strategies (BREDS) programme.  

According to a statement issued by Jones Lang LaSalle, which marketed the portfolio, the loans in the portfolio are secured by a diverse pool of office, retail, industrial and multifamily assets located in major markets around the US. The bulk of the loans in in the portfolio are collateralised by assets in New York, with additional properties in San Francisco, Boston, Miami, Houston and Chicago.

It originally was revealed in March that Eurohypo was looking to sell the portfolio. A spokesman told the Wall Street Journal that the portfolio was being put up for sale because “the bank is seeking to reduce assets in the US.” As a condition of receiving rescue funds during the credit crunch, the European Union ordered Eurohypo’s parent, Commerzbank, to sell the money-losing subsidiary by 2014. 

In January, the bank sold a portfolio of nine commercial real estate loans with a total face value of $300 million at a discount to Blackstone. The loans in that portfolio comprised a mix of performing and nonperforming mortgages backed by $700 million of underlying hotel, office, retail and mixed-use properties in the US.