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Blackstone is in talks to buy an £800M ($1B) portfolio of loans from German lender Deutsche Pfandbriefbank.
The portfolio comprises senior performing loans, split roughly equally between the U.S. and UK, React News reported.
PBB has written down the value of its U.S. loan portfolio, but this is not a distressed loan deal. The average discount on the loans being paid by Blackstone is just 6%, React reported. The 11-loan portfolio is being bought by Blackstone Real Estate Debt Strategies, the investment giant’s real estate lending business.
UK loans in the portfolio include a £110M slice of a loan secured against the five-star Qatari-owned Berkeley and Connaught hotels and a loan to the Angel Gardens build-to-rent scheme in Manchester, owned by Moda and Apache Capital.
U.S. loans include facilities secured against 95 Morton St. in New York, 1700 Pennsylvania Ave. in Washington, D.C., and 325 Main St. in Greater Boston.
PBB has a €2.6B (£2.3B, $2.8B) UK loan portfolio and a €5.1B U.S. loan portfolio. Of that U.S. portfolio, €4.5B is performing and €600M is nonperforming. The entirety is secured against offices, with 78% on the East Coast, 11% on the West Coast and 11% in Chicago.
In 2023, it wrote down the value of its performing U.S. loans by 19% and its nonperforming loans by 35%. It has taken more than €300M of loan losses, which it said would cover the expected fall in value of its U.S. loans.
BREDS has about $24B of assets under management, according to Blackstone’s full-year 2023 results. Its debt funds have made an average 9% net internal rate of return over their existence.
BREDS teamed up with the Canada Pension Plan Investment Board and Rialto Capital in December to buy a $1.2B slice of a $17B loan portfolio from failed lender Signature Bank, with the Federal Deposit Insurance Corp. retaining the remainder.
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