TPG Real Estate Acquires $2.5 Billion High-Yield Real Estate Loan Portfolio from Deutsche Bank
Loan origination and risk management team responsible for portfolio joining TPG
NEW YORK, JANUARY 9, 2015 – TPG Real Estate, the real estate platform of TPG, announced today that it has acquired a majority stake in a $2.5 billion portfolio of high-yield 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 retaining a 25 percent stake. No additional terms were disclosed.
The portfolio is comprised of 57 performing first mortgage loans on properties in gateway markets across the U.S., 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 commercial real estate assets in transition that are not easily financed by traditional lenders. The property types include apartment, office, condominium, hotel and industrial assets.
As part of the transaction, a team of 11 origination and risk management professionals from Deutsche Bank’s Special Situations Group has joined a newly-created mortgage REIT, 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 leading Commercial Real Estate group expect to continue to work together on new business opportunities.
“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,” said 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.”
“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,” said Elad Shraga, Head of Structured Finance at Deutsche Bank.
About TPG Real Estate
TPG Real Estate, the real estate platform of TPG, has invested $2.9 billion of equity in North America and Europe since 2009. Some of TPG Real Estate’s well-known investments include ST Residential, Taylor Morrison Home Corporation (NYSE:TMHC), MWest Properties, Merin BV, Parkway Properties, Inc. (NYSE: PKY), P3 Logistic Parks, Enlivant, Evergreen Industrial Properties and LifeStorage. TPG Real Estate leverages the deep sector and operating resources of TPG, a leading global private investment firm founded in 1992 with $65 billion of assets under management. TPG has extensive experience with global public and private investments executed through leveraged buyouts, recapitalizations, spinouts, growth investments, joint ventures and restructurings. For more information visit www.tpg.com.
About Deutsche Bank
Deutsche Bank is a leading client-centric global universal bank serving 28 million clients worldwide. Deutsche Bank provides commercial and investment banking, retail banking, transaction banking and asset and wealth management products and services to corporations, governments, institutional investors, small and medium-sized businesses, and private individuals. Deutsche Bank is Germany’s leading bank, with a strong position in Europe and a significant presence in the Americas and Asia Pacific.