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%).