NEW YORK CITY—Blackstone Mortgage Trust said Monday it has closed on its acquisition of substantially all of GE Capital Real Estate's mortgage loan portfolio. With the loans valued at $4.8 billion, the portfolio includes commercial real estate debt held by a joint venture of GE Capital and Abu Dhabi-based Mubadala Development Co.
The sale of the GE/Mubadala JV to BXMT had been reported earlier this month; however, the REIT did not expressly identify the JV as a part of the GE Capital loan acquisition until Monday's announcement that it had closed on the portfolio. In an SEC filing earlier this month, it made reference to “an additional $435.5 million of loan participation interests which are pari passu to related interests included in the loan portfolio.” Mubadala is seeking a buyer for the remainder of GE's 50% stake in Mubadala GE Capital Ltd., Bloomberg Business reported two weeks ago.
BXMT CEO Stephen Plavin considers himself “very pleased with our execution in closing the purchase of the GE loans. Because of the accelerated closing timeframe, the third quarter will now fully reflect the increased earnings power from these loans as well as the beneficial impact of greater scale and capital deployment on our ability to generate core earnings and dividends.” When the sale was first announced, executive chairman Michael Nash said it “effectively doubles the size of our asset base.”
The sale to BXMT was just one of five components of GE Capital Real Estate's $23-billion sale to Blackstone and Wells Fargo, GlobeSt.com reported in April. In the largest of the five, Wells Fargo agreed to purchase $9 billion in performing first mortgage commercial real estate loans backed by properties across the US, UK and Canada. That acquisition has not yet closed.
When the sale was first announced, GE said it was part of a strategy to largely exit the financial services business over the next two years. “The future of GE is as an industrial company,” CEO Jeffrey Immelt said on an April 10 investors call, adding that the company would focus on “core verticals and markets that GE knows best.”
To that end, GE separately announced Monday that it would sell its global fleet business to Element Financial Corp. and Arval, with the latter signing a memorandum of understanding to acquire the European arm of that business. The sale to Element Financial is valued at $6.9 billion.
“We continue to demonstrate speed and execution on our strategy to sell most of the assets of GE Capital,” says Keith Sherin, GE Capital's chairman and CEO. “We are on track to execute sales of $100 billion by the end of 2015 and expect to be substantially done by the end of 2016.”
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
