NEW YORK — TPG Real Estate, the real estate platform of global private investment firm TPG, has acquired a majority stake in a $2.5 billion portfolio of real estate loans from Deutsche Bank’s Special Situations Group. Under the terms of the agreement, TPG Real Estate will acquire a 75 percent stake in the portfolio, with Deutsche Bank (NYSE: DB) retaining a 25 percent stake.
“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.”
As part of the transaction, 11 origination and risk management professionals from Deutsche Bank’s Special Situations Group have joined a newly created mortgage REIT — known as TPG Real Estate Finance Trust (TRT) — 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. TRT and Deutsche Bank’s commercial real estate group expect to continue to work together on new business opportunities.
The portfolio is comprised of 57 performing first mortgage loans on properties 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 apartment, office, condominium, hotel and industrial assets.
“Our leading 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,” says Elad Shraga, head of structured finance at Deutsche Bank.
TPG Real Estate has invested $2.9 billion of equity in North America and Europe since 2009. Some of TPG Real Estate’s investments include ST Residential, Taylor Morrison Home Corp. (NYSE: TMHC), MWest Properties, Merin BV, Parkway Properties Inc. (NYSE: PKY), P3 Logistic Parks, Enlivant, Evergreen Industrial Properties and LifeStorage. TPG Real Estate’s parent company TPG was founded in 1992 and features approximately $65 billion of assets under management.
Deutsche Bank is a global universal bank serving 28 million clients worldwide. The bank is Germany’s leading bank, with a strong position in Europe and a significant presence in the Americas and Asia Pacific.
Deutsche Bank’s stock price closed at $28.26 per share on Friday, Jan. 9, down from $51.96 per share at this time last year.
— John Nelson