A $740 million portfolio of performing loans on U.S. properities held by German lender Eurohypo has been purchased by US Bancorp (>> U.S. Bancorp), Wells Fargo & Co (>> Wells Fargo & Company) and private equity firm Blackstone Group LP (>> The Blackstone Group L.P.), according to sources familiar with the deal.
US Bancorp (>> U.S. Bancorp) bought a $180 million loan tied to property owned by General Growth Properties Inc (>> General Growth Properties Inc) at a slight discount to face value, paying in the high 90s percent of loan value, a source said.
Wells Fargo & Co (>> Wells Fargo & Company) and Blackstone Group LP (>> The Blackstone Group L.P.) teamed up to buy about $560 million of loans. The bank and the private equity group have agreed to own the individual loans separately and not co-own any of them, a source said.
The $740 million in performing loans were put on the market by Eurohypo as it unwinds its balance sheet of about $4 billion of U.S. loans. Jones Lang LaSalle Inc (>> Jones Lang LaSalle Incorporated) began marketing the loans last month, attracting more than 100 interested parties.
Many failed European banks have been taken over by their governments, reduced or wound down. Last year Allied Irish Banks Plc (>> Allied Irish Banks) and Anglo Irish Bank Corp Ltd <ANGLLN.UL> sold their vast portfolios, including billions of dollars worth of loans on U.S. properties.
Wells Fargo & Co (>> Wells Fargo & Company) and JPMorgan Chase & Co (>> JPMorgan Chase & Co.) have been active buyers of performing loans, while distressed debt and equity investor Lone Star Funds has snatched up non-performing debt.
The group of loans from Eurohypo includes a dozen individual properties as well as groups of properties. They include offices, retail space, land, warehouses and apartments. Many are located in New York, while other properities are in Boston, Miami, Houston, Chicago and San Francisco.
A representative from Blackstone declined to comment. Representatives from US Bancorp and Wells Fargo could not be reached for immediate comment.
Eurohypo was one of the most active lenders during the U.S. commercial real estate boom of 2003 to 2007. However, last year it was absorbed by the state-backed lender Commerzbank AG (>> Commerzbank AG), which has won European Union approval to wind it down instead of restructuring it.
The current sale is one of several expected as Eurohypo unwinds the entire $4 billion U.S. portfolio.
(Reporting By Ilaina Jonas; Editing by Richard Pullin)
By Ilaina Jonas