NEW YORK CITY–TPG Real Estate, the real estate platform of TPG, has acquired a majority stake in a $2.5 billion portfolio of high-yield real estate loans from Deutsche Bank's special situations group. Under the terms of the agreement, TPG Real Estate will acquire a 75% stake in the portfolio, with Deutsche Bank retaining a 25% stake. No additional terms were disclosed.
The portfolio is comprised of 57 performing first mortgage loans on properties in gateway markets across the US, primarily in New York and Los Angeles. The loans, with a weighted average life of less than three years and an average loan size of approximately $40 million, are backed by commercial real estate assets in transition that are not easily financed by traditional lenders. The property types include apartment, office, condominium, hotel and industrial assets.
As part of the transaction, a team of 11 origination and risk management professionals from Deutsche Bank's special situations group has joined a newly-created mortgage REIT, TPG Real Estate Finance Trust that will own the existing portfolio as well as originate new loans to existing and new borrowers. TRT raised capital from a group of institutional investors with total equity commitments in excess of $750 million that will allow for originations of new loans by the platform.
“We are very excited about this unique, proprietary opportunity to acquire the existing portfolio, as well as to expand the business as we grow the platform through new originations,” says Avi Banyasz, TPG partner and co-head of TPG Real Estate. “We are very fortunate to have the same strong Deutsche Bank team in place, which will provide continuity for current borrowers and open the door to relationships with the growing number of new borrowers in need of financing.”
Adds Elad Shraga, head of structured finance at Deutsche Bank, “Our commercial real estate franchise offers a highly diversified product suite to our clients. We are always seeking ways to enhance our platform to remain at the forefront of providing innovative services and solutions. This new platform, which combines DB's expertise in high yield CRE debt and the strength of TPG's global brand, will improve this client experience.”
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
