Lehman seeks to sell $40bn real estate portfolio

US investment bank Lehman Brothers is reportedly in talks to sell its $40bn (EUR 27.2bn) portfolio of commercial real estate, mortgages and mortgage-backed securities to shore up its battered balance sheet.

The Financial Times said on Saturday that Lehman wants to sell the assets either as one unit or in packages. But people who had been involved in the talks told the newspaper that the was a gap between the bank's views of the value of the portfolio and that of potential buyers. Lehman Brothers declined to comment.

The newspaper said Lehman has offered to shoulder the first $5bn of any losses suffered on the portfolio's assets following a sale to sweeten the deal. If the sale talks fail, Lehman would consider spinning off the entire commercial property division and listing it separately, sources told the Financial Times.