NEW YORK AND SAN FRANCISCO — Blackstone and Wells Fargo Co. have signed agreements to purchase most of the assets of GE Capital Real Estate in a transaction valued at approximately $23 billion.
The transaction breaks down as follows:
– Wells Fargo has agreed to purchase performing first mortgage commercial real estate loans valued at $9 billion in the United States, UK and Canada.
– Blackstone’s latest flagship global real estate fund, BREP VIII, has agreed to purchase the US equity assets for $3.3 billion. These assets are primarily office properties in Southern California, Seattle and Chicago.
– Blackstone’s European real estate fund, BREP Europe IV, has agreed to purchase the European equity real estate assets, for €1.9 billion. These consist of office, logistics and retail assets, largely in the UK, France and Spain. The logistics assets will be integrated into Blackstone’s European logistics platform, Logicor, and the retail assets into its European retail platform, Multi.
– BREDS, Blackstone’s real estate debt fund, has agreed to purchase performing first mortgage loans in Mexico and Australia for $4.2 billion.
– BXMT, Blackstone’s publicly traded commercial mortgage REIT, has agreed to purchase a $4.6 billion portfolio of first mortgage loans primarily in the US with Wells Fargo providing the financing.
The transactions are subject to normal regulatory and other approvals. The initial closings will take place in the second and third quarter of the year.
“This is an important transaction in the commercial real estate industry and Wells Fargo is pleased to be working with our colleagues at GE Capital and Blackstone,” says Mark Myers, head of commercial real estate for Wells Fargo.
“The portfolio of performing loans we’ve purchased is a strong addition to our commercial real estate platform in the United States, the United Kingdom and Canada, which are all active lending markets for us,” he adds.
Eastdil Secured/Wells Fargo Securities acted as advisor to Blackstone and Wells Fargo. Simpson Thacher & Bartlett LLP acted as legal counsel to Blackstone and Dechert LLP acted as legal counsel to Wells Fargo.
Kimberlite Group and BofA Merrill Lynch advised GE Capital. Hogan Lovells represented GE Capital.
“We are delighted to partner with GE on another major transaction and we thank them for their confidence in us. We also thank Wells Fargo for our longstanding relationship, and for their swift execution on this investment,” says Jon Gray, global head of real estate for Blackstone. “This transaction clearly demonstrates the unique scale and reach of our real estate platform.”
New York-based Blackstone is a global real estate investor. Blackstone’s real estate business was founded in 1991 and has approximately $81 billion in investor capital under management. Blackstone’s real estate portfolio includes hotel, office, retail, industrial and residential properties in the US, Europe, Asia and Latin America.
Wells Fargo & Co. is a nationwide, diversified, community-based financial services company with $1.7 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance.
GE Capital is the financial services unit of the American conglomerate General Electric. GE Capital provides commercial lending and leasing and other financial services for health care, media, communications, entertainment, consumers, real estate and aviation.
— Danielle Everson