$1.8B London Loan Portfolio Sold

Kennedy Wilson, an international real estate investment and services company headquartered in Beverly Hills, CA, announced this week that it had entered into an agreement to purchase a loan portfolio from Bank of Ireland for $1.8 billion according to a Bloomberg report. "The biggest opportunities are in Europe," said Chief Executive Officer William McMorrow in a telephone interview. "The U.S. banks have all raised capital and they're not under as much pressure right now to sell assets." The purchase will close in two phases, with $1.4 billion completed on Friday, October 21 and an additional $400 million expected to close at the end of November.

Mary Ricks, executive vice chair of Kennedy Wilson, said of the deal that the "Kennedy Wilson team did an excellent job on this complex transaction, and we believe that this closing will serve as a base for the company's further expansion in Europe."

About 70% of the loans are secured on office, apartment and retail properties in London reported The Irish Times. Bank of Ireland disclosed the transaction when it announced earlier this month that it had deleveraged the bank by disposing of about €5 billion of loans – half of it non-core loans – at a discount of 9% on their face value.

For more news and information visit Blumberg Capital Partners.

Wells Fargo Expands CRE Lending

The end of August was busy for Wells Fargo with the Anglo Irish Bank deal, which followed the purchase of about $1.4 billion in U.S. loan holdings from the Bank of Ireland and roughly $500 million in loans bought from Allied Irish Banks PLC earlier this year. The Wall Street Journal has written an article looking at Wells Fargo's marked expansion in CRE titled Wells Fargo Jumps on Commercial Deals. An excerpt from the article:

Wells Fargo had emerged as the leading holder of commercial mortgages among banks, according to Trepp LLC, which tracks commercial property lending. During the second quarter, Wells Fargo's loan holdings grew by $3.3 billion, bringing its total to $100.2 billion, according to Trepp. The data exclude construction loans.

"We like the risk-return of the business," said David Hoyt, who heads wholesale banking for Wells Fargo.

The amount of commercial property loans held by the next five largest commercial real-estate lenders after Wells Fargo decreased by $1.3 billion, according to Trepp. While many of these banks are making new commercial real-estate loans, old loans have been maturing or have been sold off at a faster pace than new loans have been made.

Still, Wells Fargo has been far more aggressive than other banks, partly because it was less wounded by commercial real estate than many competitors, some of which virtually shut down lending in the sector through much of the downturn.

For more news and information visit Blumberg Capital Partners.

Wells Fargo Wins Bid for $1.4B CRE Portfolio

Wells Fargo & Co. had the winning bid for the Bank of Ireland's commercial real estate portfolio, consisting of 25 loans for properties in Boston, New York and DC, picking up the portfolio for $1.4 billion according to a Wall Street Journal report. The loans were sold near their face value. The sale is part of Bank of Ireland's deleveraging efforts; in March Bank of Ireland was ordered by the country's financial regulator to cut its portfolio by a quarter after hitting financial difficulty

A spokesman for Wells Fargo declined to comment, as did a broker for HFF LP, which handled the Bank of Ireland sale according to the WSJ. This is the second acquisition this year by Wells Fargo of an Irish bank's CRE loan portfolio. The San Francisco-based financial services institution had previously teamed with Blackstone Group LP to buy approximately $1 billion in CRE loans from Allied Irish Banks PLC.

For more news and information visit Blumberg Capital Partners.