Allianz, Germany’s largest insurance firm is seeking to exploit distressed real estate situations in the US as it seeks to “boost returns” from its portfolio.
In an interview with Bloomberg, Paul Achleitner, head of the Munich-based firm, highlighted there would be attractive investment opportunities in commercial real estate particularly as a result of banks foreclosing on distressed borrowers.
The industry has yet to see swathes of assets coming to the market because of foreclosings and some of real estate’s biggest names, such as Equity Group Investment’s Sam Zell, have warned that banks have been more amenable to extending existing loans than demanding back the keys.
Despite this, however, Allianz joins a host of names waiting in the wings in anticipation.
“The pricing isn’t where it ought to be yet,” Achleitner said, “We think there are going to be some very attractive buying opportunities and they haven’t happened yet.” He admitted that the banks would still have to accept more writedowns and credit losses before it would open the door to slashed-price sales.
“This time around, the banks don’t want to repossess because the moment they own it, it bears on their capital,” Achleitner said. “So therefore, they’re actually reorganizing the stuff, anything, as long as they don’t have to take it on their balance sheet.”
Allianz’s real estate strategy is led by head of real estate, Oliver Piani, who said inrecent interviews that Boston and New York properties may be on the firm’s shopping list.