Normandy Real Estate Partners has offered the winning bid on Capmark Financial Group's $1.06 billion real estate debt fund, beating out stalking horse bidder PCCP. The Morristown, New Jersey-based investment firm offered a final bid of $12.7 million at the 29 April live auction, according to a report by Dow Jones, topping PCCP's stalking horse bid of $7.55 million.
PCCP has long been considered the frontrunner for taking control of the fund, known as Capmark Structured Real Estate Partners. Last month, a Delaware bankruptcy court named the Los Angeles recapitalisation firm as the stalking horse bidder.
“There was always a chance that other bidders could show up at the auction,” said William Lindsay, founding partner of PCCP. “We suspected others were interested.”
In fact, three other bidders arrived at the auction—Normandy, Oaktree Capital Management and Winthrop Realty Trust. Lindsay described the auction as “quite spirited,” adding, “When the price got beyond what we were willing to pay, we got out.”
According to a source familiar with the deal, many of the assets in the Capmark fund are located in Normandy's core markets of Boston, New York City, New Jersey and Washington, DC. Once Normandy officially closes the deal—which should take place in the next week, according to one source—the firm plans to continue managing the fund's assets as Capmark had been doing.
Capmark has been selling off assets since it filed for Chapter 11 bankruptcy protection in 2009.