In UK property news, Blackstone, Lone Star, and Starwood are reportedly interested in bidding on a huge UK property loan portfolio of Commerzbank AG‘. If the deal bidding is won at the suggested level of £5 billion, it would be the largest portfolio of assets of a kind sold in Europe since the 2oo8 financial crisis began.
It’s no secret that toxic assets across Europe would sooner or later go on the bidding block for high bidders to rescue banks from the strangle hold of bad paper. In the latest scenario Wells Fargo had reportedly teamed up with Lone Star to compete with Starwood over the suggested portfolio which contains Hypothekenbank Frankfurt’s 100 or so UK commercial property loans.
Germany’s second-largest lender, one that received major bailout cash, the bank has sought for some time to balance the books. The sale of this portfolio would kill two birds with a single stone. Hypothekenbank Frankfurt’s exposure to high risk commercial real estate default is something on the order of €56 billion euros. News from Blackstone Group, the firm most would consider the front runner in bidding, is not forthcoming.