One Of The Largest Commercial Real Estate Debt Transactions Ever
By David Shirt
National law firm Irwin Mitchell's real estate team has advised US bank, Wells Fargo, on the acquisition of a £4 billion commercial real estate loan book from Hypothekenbank Frankfurt (formerly Eurohypo). This is one of the largest European commercial real estate debt transactions ever.
Commerzbank, which owns Hypothekenbank Frankfurt stated that the blended discount across the whole loan book was 3.5% against a "fair valuation of the portfolio."
The £4bn commercial real estate loan book has been split, with £2.7 billion of performing UK property loans being acquired by Wells Fargo and £1.3 billion of non-performing loans being acquired by its private equity partner, with financing from Wells Fargo.
The transaction encompasses all interest rate and currency hedging derivatives, as well as the entire operational business of Eurohypo, which had been renamed by Commerzbank last summer.
In the deal, the UK staff of Hypothekenbank Frankfurt are transferring to Wells Fargo in London, with Hypothekenbank Frankfurt's Max Sinclair becoming head of the London commercial real estate office .
Hypothekenbank Frankfurt's office space at 90 Long Acre has also become Wells Fargo's new UK commercial real estate headquarters.
Irwin Mitchell handled all the England and Wales real estate due diligence aspects of the deal.
The Irwin Mitchell team was led by real estate partner Rob Thompson, assisted by Louise Cartwright and Emma McPeake.
Commenting on the deal, Rob Thompson, real estate partner at Irwin Mitchell said, "This is the first time we have acted for Wells Fargo, a leading US bank and we are delighted to have advised on such a major acquisition and prestigious deal. The real estate due diligence on a portfolio of this size required immense organisation and careful management to ensure the matter proceeded smoothly.”
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