Deutsche Pfandbriefbank said it is looking to sell more performing and non-performing loans after agreeing to sell a roughly €900 million portfolio to Blackstone Group.
The German lender warned that it expected further downward valuations of US offices in the second quarter of 2024 but said they would be lower than those seen in 2023.
Pbb’s non-performing loans rose 7.3% to €1.65 billion between the end of 2023 and the end of March. It has a €31.3 billion performing loan book.
Most of its non-performnig loans are secured against US offices. Non-performing loans in the US rose to €672 million at the end of the first quarter, up from €607 million three months earlier.
Pbb has revalued its US non-performing portfolio in the last 12 months, which led to a 35% drop in value. During the first quarter of the year, it restructured a €46 million loan, while another €46 million loan was repaid. The non-performing loans in the US are secured against offices, with 42% on the east coast, 30% on the west coast and 28% in Chicago. It has €3.8 billion of performing loans in the US, which lost 17% in value following a revaluation during the last 12 months.
Pbb earlier today said it will sell a circa €900 million performing loan portfolio secured against office, residential and hotel properties in the US and the UK.
The German lender did not identify the buyer. However, a source familiar with the situation said it was Blackstone Group, confirming an earlier report by React News. The US private equity firm is in talks to acquire the portfolio for its Blackstone Real Estate Debt Strategies.
The largest US positions in the portfolio are secured against 95 Morton Street, New York; 1700 Pennsylvania Avenue, Washington DC; and 325 Main Street, Kendall Square in Boston, according to React News.
The largest UK position is a circa £110 million slice of a syndicated loan secured against the Berkeley and Connaught hotels in London, which are owned by Sheikh Hamad bin Jassim Al Thani of Qatar’s Constellation Hotels.
A loan to Moda and Apache’s Angel Gardens build-to-rent development in Manchester is also included.