GE Capital has completed a €315m (£227m) financing of a pan-European office purchase in the week the rump of its global real estate business was sold to Blackstone and Wells Fargo.
GE has provided a five-year loan for NorthStar Realty Finance’s €450m purchase of the Trias portfolio, which was sold by German insurer Provinzial NordWest. The financing reflects a loan-to-value ratio of 70% and has been priced at close to 250bps above Euribor.
It will be one of the last major real estate lending deals GE Capital will transact before it is sold.
Wells Fargo and Blackstone signed an agreement to purchase $23bn (£15.5bn) of assets from GE last week as part of a process that will see GE Capital and the real estate business within it close by the end of the year.
GE Capital is to progress with the funding of any further debt deals it has already formally committed to, but any deals in negotiation will have to be approved by Blackstone or Wells Fargo in order to progress.
The structure of the deal involves around €400m of GE Capital’s European debt being bought by Blackstone’s US-listed mortgage REIT and around €1.7bn being bought by Wells Fargo.
The Trias portfolio comprises 38 office, retail and industrial properties and one hotel in Germany, France, Italy and Belgium. Prior to the sale, conducted by PwC, the portfolio was managed through IVG, Internos Global Investors and Deka.
US-listed NorthStar is in the process of building a European property portfolio to spin off as a REIT on the New York Stock Exchange. The process will complete in the second half of the year, with the REIT known as NorthStar Realty Europe. The company is also considering a dual European listing.
Last month, NorthStar completed the purchase of another pan-European portfolio, paying SEB Asset Management €1.1bn for 11 offices in London, Paris, Hamburg, Milan, Brussels, Amsterdam and Rotterdam.
NorthStar’s drive into Europe is being led by Mahbod Nia, former senior executive director in Goldman Sachs’ real estate banking group.
