Last updated: 11:57 / Friday, 10 April 2015
Most of its Real Estate Assets

Wells Fargo and Blackstone Sign a Mega Deal to Acquire a Real Estate Portfolio of $23 Billion From GE Capital

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Wells Fargo and Blackstone Sign a Mega Deal to Acquire a Real Estate Portfolio of $23 Billion From GE Capital
  • Wells Fargo Acquires the portfolio of performing first mortgage commercial real estate loans in the US, UK and Canada
  • It also finances Blackstone for part of the deal ($4.6 billion)
  • Blackstone keeps the US and European equity real estate assets, as well as the performing first mortgage loans portfolio in Mexico and Australia and in the US
  • The transactions are subject to normal regulatory and other approvals

Blackstone and Wells Fargo announced that they had 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 $9.0 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.

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.

GE Capital was advised by Kimberlite Group and BofA Merrill Lynch and represented by Hogan Lovells.

Mark Myers, Head of Commercial Real Estate for Wells Fargo, said, “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. 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.”

Jon Gray, Global Head of Real Estate for Blackstone, said, “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. This transaction clearly demonstrates the unique scale and reach of our real estate platform.”

These transactions are subject to normal regulatory and other approvals. The initial closings will take place in the second and third quarter of the year.

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