Final White Tower asset sells for £288m

One of the largest loan workouts in Europe has come to an end with the final asset sale of a portfolio which defaulted in June 2009, according to an announcement by the loan’s special servicer, CB Richard Ellis. The sale brings the total amount recovered from the £1.45 billion loan to £1.1 billion.

The last asset of a large UK real estate portfolio subject to a loan default in 2009 has finally been sold, according to the loan’s special servicer.

Richard Ellis, which was appointed special servicer to the White Tower portfolio of London offices in August 2009, said it had arranged the sale of the 320,000 square foot Aviva Tower for £288.25 million (€326.4 million; $472.2 million), in a deal reflecting a 6.8 percent yield.

The firm declined to divulge the identity of the buyer, although according to a report by the Daily Telegraph newspaper, the buyer is said to have hailed from the Far East and have beaten five other bidders to capture the property.

The sale of the Aviva Tower meant that, of the £1.45 billion of debt behind the portfolio, the gross total amount recovered was £1.1 billion.

The tower, which is occupied by Aviva, was one of nine properties totalling approximately 2.25 million square feet to have become subject to a loan default after their previous owner, the entrepreneur Simon Halabi was unable to meet his obligation on the portfolio’s debt, which had been securitised via a CMBS structure.

Halabi bought the assets which make up the portfolio in the years leading up to the global financial crisis. In 2006, they were reportedly valued at £1.8 billion.

The debt fell into default in June 2009 after the valuation of the assets fell to £929 million. CBRE’s Richard Ellis Loan Servicing (CBRELS) was appointed two months later by the loan’s noteholders to work out the best outcome for the assets.

Ultimately, that resulted in a series of sales, including a portfolio of six properties to The Carlyle Group for £671 million in July last year on behalf of its Carlyle European Real Estate Partners III opportunity fund, which closed on €2.2 billion of equity in June 2008.

Paul Lewis, director at firm’s CBRELS, said: “In just under two years and in one of the most challenging real estate environments experienced, we are pleased to have been able to secure significant recovery for noteholders.”
He also said: “Critically, the exit process from each asset was carefully controlled, enabling maximum recoveries to be achieved, and proving that enforced sales do not need to be fire sales.”