FRANKFURT—More than $2 billion in commercial real estate loans will be transferred from Deutsche Bank AG's portfolio into the hands of private equity firm TPG. That's according to a report from Reuters, which obtained the information from unnamed sources familiar with the deal.
Driven by the strong US commercial real estate market, the German banking powerhouse is said to be close to selling most of its portfolio, and it's expected to realize a profit on the sale. Financial institutions globally have also begun downsizing their balance sheet holdings ahead of the implementation of the Volcker Rule, a provision of the 2010 Dodd-Frank Act that restricts banks' ability to trade with their own money.
The package contains mortgages for retail malls and office buildings that DB both originated and purchased. According to the sources, the deal could close this month, though as of now it remains subject to regulatory approval. DB would continue to hold a minority stake in the assets.
GlobeSt.com reported on the rumored sale last month, stating that DB may partner with a private equity firm to offload the assets under its Special Situations Group. That division—formed in 2004 headed by DB's global head of commercial real estate and head of risk for structured finance, Jonathan Pollack—bought up a considerable amount of distressed commercial mortgages and other real estate debt instruments in the secondary market from other financial institutions and non-bank lenders globally. In 2012, for instance, DB bought a portfolio of loans with a face value of $911 million from Capmark Financial Group.
As for TPG, the firm's been on a buying spree of late. Recently, a TPG-led consortium of investors, which also includes PAG Asia Capital and the Ontario Teachers' Pension Plan, announced it would acquire brokerage firm Cassidy Turley for $600 million. The group also acquired DTZ, a Chicago-based global property services firm, in a massive $1.2-billion deal. Cassidy Turley would be merged with DTZ.
GlobeSt.com is following this story and will provide an update once more details of the agreement emerge.
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Sule Aygoren
Aygoren oversees the editorial direction and content for ALM’s Real Estate Media Group, including Real Estate Forum and GlobeSt.com. In her tenure with ALM, she’s held roles of increasing responsibility, including Managing Editor. Aygoren has received several awards for her coverage including Best Trade Magazine Report from the National Association of Real Estate Editors and the James D. Carper Award for Young Journalists. Under her direction, Forum has received four national NAREE awards for Best Commercial Real Estate Trade Magazine.
