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Oaktree wins €675m German loan book

The Los Angeles-based firm has purchased a portfolio of sub-performing loans backed by German real estate  

Oaktree Capital Management, the Los Angeles-firm said to be preparing the launch of its next global real estate opportunity fund, has struck a large deal in Europe.

The company led by Howard Marks has reportedly agreed to pay €675 million for a portfolio of sub-performing loans backed by German real estate being sold by UK building society, Nationwide.

A report by CoStar, the UK property news service, said that Oaktree was paying a price equivalent to a 20 percent discount given the outstanding balance of the loans was €850 million.

The portfolio, dubbed Project Adelaide, and contains approximately 200 retail, office and industrial commercial properties throughout Germany.

Oaktree is among a batch of firms actively bidding on portfolios being sold in Europe by financial organisations that have deemed the real estate noncore to their business. Others include Cerberus, Kildare Partners, Lone Star, Kennedy Wilson, Goldman Sachs, Deutsche Bank, and Apollo Global Management.

The deal chimed with comments made by Marks on an investor call in February. On the call, he said: “Although core real estate, which is not our focus, has recovered substantially, we continue to find opportunity in a number of other areas, including non-performing residential and commercial loan pools and commercial properties in non-core markets,” he said.

Deloitte is advising Nationwide on the sale of Project Adelaide.