Blackstone, Wells Fargo in $23bn swoop as GE exits real estate

Related images

  • Manhattan, New York

GE is selling a portfolio of commercial real estate loans and assets to Blackstone and Wells Fargo for $23bn (€21.7bn).

The bulk of GE’s assets from its GE Capital Real Estate arm will be offloaded as the firm focuses on its industrial businesses. The deals are due to close in the second and third quarter.

GE said it has letters of intent from other buyers for an additional $4bn of commercial real estate assets.

The firm said GE Capital had been an “important part of the history of GE”.

“However, the business model for large, wholesale-funded financial companies has changed, making it increasingly difficult to generate acceptable returns going forward.”

Wells Fargo has agreed to take GE Capital’s performing first-mortgage commercial real estate loans, valued at $9bn. The loans are originated in the US, UK and Canada.

Mark Myers, head of commercial real estate for Wells Fargo, said the portfolio is a “strong addition” to its commercial real estate platform in the US, UK and Canada.

Blackstone, meanwhile, will pay $3.3bn for GE Capital’s US equity assets on behalf of its Blackstone Real Estate Partners VIII fund. The portfolio is made up of mainly office properties in Southern California, Seattle and Chicago.

Blackstone’s European real estate fund, Blackstone Real Estate Partners Europe IV, has agreed to pay $1.9bn for GE Capital’s European equity real estate assets. The office, logistics and retail assets are largely in the UK, France and Spain.

The logistics assets will be taken by Blackstone’s European logistics platform, Logicor, and the retail assets will go to its European retail platform, Multi.

BREDS, Blackstone’s real estate debt fund, will take on performing first mortgage loans in Mexico and Australia for $4.2bn.

BXMT, Blackstone’s publicly traded commercial mortgage REIT, will purchase a $4.6bn portfolio of first-mortgage loans. The purchase of the portfolio of mainly US assets is being financed by Wells Fargo. The 82 first mortgage loans are secured by assets in core and target markets, including the US (68%), Canada (15%), the UK (10%) and Germany (7%).

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2548

    Asset class: Fixed Income, Emerging Market Debt Hard Currency (Active).
    Asset region: Emerging Markets.
    Size: CHF 300-400m.
    Closing date: 2019-07-30.

  • QN-2549

    Asset class: Fixed Income, Emerging Market Debt Hard Currency (Passive or Passive Enhanced).
    Asset region: Emerging Markets.
    Size: CHF 300-700m.
    Closing date: 2019-07-30.

  • QN-2550

    Asset class: Fixed Income, Emerging Market Debt Local Currency (Active).
    Asset region: Emerging Markets.
    Size: CHF 250-350m.
    Closing date: 2019-07-31.

  • QN-2551

    Asset class: Fixed Income, Emerging Market Debt Local Currency (Passive or Passive Enhanced).
    Asset region: Emerging Markets.
    Size: CHF 250-350m.
    Closing date: 2019-07-31.

  • QN-2552

    Asset class: Fixed Income, High Yield (Active).
    Asset region: High Yield (US).
    Size: CHF 500-600m.
    Closing date: 2019-07-29.

  • QN-2553

    Asset class: Fixed Income, High Yield (Passive or Passive Enhanced).
    Asset region: High Yield (US).
    Size: CHF 500-1'100m.
    Closing date: 2019-07-29.

  • QN-2554

    Asset class: Global Real Estate (Equity, unlisted Funds).
    Asset region: World (ex-Switzerland).
    Size: CHF 200 mn (potential for further growth).
    Closing date: 2019-08-07.

  • QN-2556

    Asset class: FX Hedging.
    Asset region: Global.
    Size: Mandate size of CHF 1.5 bn.
    Closing date: 2019-08-09.

  • QN-2557

    Asset class: All/large Cap Equities.
    Asset region: China A-shares.
    Size: Unit linked platform (0m USD in initial investment).
    Closing date: 2019-08-01.

Begin Your Search Now