The deal with INGREF follows Wells Fargo's acquisition of $6 billion in UK loans last month.
SAN FRANCISCO-ING Real Estate Finance (USA) LLCsaid Friday that it has reached an agreement to sell 29 US CRE loans with a total outstanding balance of $1.6 billion toWells Fargo Bank. Terms were not disclosed.
This past spring, the Wall Street Journal reported that New York City-based INGREF planned to put about $2.5 billion of performing CRE loans up for sale as it continues to wind down its US property-lending business. Citing unnamed sources, the WSJ reported that INGREF expected to sell the loans at face value or higher.
For INGREF, the performing loan sale, representing about half its domestic CRE portfolio, “is a result of the successful execution of our strategy to capitalize on current robust US market conditions to generate strong interest in the loan portfolio among a high-quality pool of potential buyers,” says Michael Shields, managing director and head of INGREF Western Europe, UK, USA and Structured Products. “As ING sharpens the focus of its Real Estate Finance business, we will continue to deliver tailored real estate financing solutions in our other Real Estate Finance markets.” The company announced this past September that it would manage down the US CRE loan portfolio.
At Wells Fargo, Mark Myers, head of commercial real estate with the San Francisco-based bank, says that adding the loans to the portfolio is “consistent with our business strategy and risk management practices. Many of our existing customers have loans in this portfolio as well, and we look forward to meeting the needs of those customers while strengthening our commercial real estate business through this acquisition.” Morrison & Foerster LLP served as counsel to INGREF in the transaction, while Dechert LLP did the same for Wells Fargo.
Last month, Wells signed an agreement to acquire Commerzbank’s Hypothekenbank Frankfurt (formerly Eurohypo) UK CRE portfolio. The transaction includes $6-billion portfolio of loans backed by institutional assets throughout the UK, with a focus in London.
A portion of the portfolio, consisting of approximately $1.96 billion of non-performing assets, will be acquired by Lone Star Funds, with Wells providing the financing. The transaction is expected to close by the end of this quarter.