Lone Star & Blackstone Battle For the Largest Real Estate Portfolio in Spain

14/05/2014 – Expansion

The Europe´s biggest loan portfolio sale reaches its final stage. German banking entity Commerzbank has chosen two alliances of Lone Star and JPMorgan on one side and Blackstone and Deustche Bank on the other that will bid for the €4.5 million in Spanish real estate debt originating from its branch Eurohypo.

The “Octopus Project“, as the portfolio was named, might raise between €2.5 – €3 billion. It includes real-estate-backed loans granted to large real estate companies, hotel groups and international investment funds. Thereby, inside it one may find property like the Zielo de Pozuelo shopping mall in Madrid or the MN4 in Valencia, also hotel debt of e.g. the Ritz, the Gran Meliá Fénix and the ME hotel in Madrid, as well as buildings situated in main Spanish, Portugese and Swiss cities, such as offices housing lawyers of Garrigues, Uria, Cuatrecasas, or the construction company Sacyr.

Around €700 million worth of loans embraced by the “Octopus” are non-performing, €1.5 billion consists of sub-performing credits, while loans for €2.3 billion are still progressively paid-off.

Several fund-bank allies strived for only a part of the loan scope, unsuccessfully.

Everything points to Lone Star and JP Morgan team as the winner as the first fund has not closed any acquisition in Spain yet. Moreover, the other bidder team is formed by one of Commerzbank´s main competitors, another German entity, Deutsche Bank.

On the other part, Blackstone will be difficult to stop after having acquired Catalunya Banc´s property servicer, 1.860 subsidized homes from Madrid´s City Council and another lot of 1.000 houses of this kind from Sareb and FCC.



Original aticle: Expansión (by Jorge Zuloaga)

Translation: AURA REE