LONDON-Wells Fargo & Co. has inked a deal to acquire Commerzbank's Hypothekenbank Frankfurt (formerly Eurohypo) UK commercial real estate portfolio.

The transaction includes a $6.05 billion (£4.0B) portfolio of commercial loans comprised of high-quality institutional properties across the UK with a focus in London. A portion of the portfolio, consisting of approximately $1.96 billion (£1.3B) of non-performing assets, will be acquired by Lone Star Funds, with Wells Fargo providing the financing. The transaction is expected to close in Q3.

“This transaction, in combination with Wells Fargo's long-standing real estate expertise, will help create a best-in-class commercial real estate platform in the U.K.,” said Bill Vernon, executive vice president and group head who led the acquisition team for Wells Fargo Commercial Real Estate. “Hypothekenbank Frankfurt's 20-year history in London, their recognition as a market leader in the commercial real estate industry, and our similar approaches to building quality assets and providing outstanding client service all add up to a great strategic expansion opportunity for Wells Fargo's U.K. Commercial Real Estate business.”