Investment vehicles managed by Colony Capital LLC (Colony) have completed the acquisition of a portfolio of institutional real estate collateralised non-performing loans (NPL) from four German banks, including Eurohypo, Landesbank Hessen-Thüringen (Helaba), Berlin Hyp and Archon Capital Bank. These first ranking loans have a face value of EUR370 million and were utilised to develop properties primarily in Berlin and Frankfurt in the mid to late 1990s.
All loans in the portfolio were held by one borrower. Whole loans are the only loans related to the properties and will be sold together by the lenders. There are no senior, pari-passu or junior liens.
Since the end of 2009 Colony has made four NPL portfolio acquisitions in Germany over an 18 month period.
“This transaction marks the first time syndicated loans were sold together as a package by a banking consortium as an NPL transaction in Germany, and possibly in Europe,” says Dilip Awtani, Managing Director and head of Colony’s Europe Debt Strategies. “We believe the underlying properties are attractive commercial real estate investments that can be re-positioned into core-plus or similar properties. Our strategy is to partner with bankers to help them reduce exposure to non-performing loans and to monetize illiquid assets. Europe is an active arena for underperforming and distressed assets, and we are pursuing many commercial real estate opportunities throughout the region to put our capital to work.”
Morgan Lewis provided legal counsel to Colony on this transaction.
