Blackstone borrowed €13bn of European real estate debt in 2015

Blackstone borrowed around €13 billion of real estate debt during 2015 to fund its European investment programme, Real Estate Capital has learned.

The firm closed 50 financings, including a jumbo near €3 billion loan from Credit Suisse, making it likely to have been last year’s biggest European borrower of real estate finance.

The firm’s largest financing of 2015 was a €2.8 billion loan-on-loan facility to fund its 2014 Project Hercules purchase, of a portfolio of Spanish residential mortgages.

It has emerged that Credit Suisse provided a 78 percent loan-to-value facility to back Blackstone’s €3.6 billion purchase of the Project Hercules portfolio from Catalunya Caixa.

Blackstone was selected as the buyer of Project Hercules in July 2014. However, the complex deal, which involved a participation from Spanish state bank rescue fund FROB, eventually closed in April 2015 along with the financing.

Credit Suisse is understood to have priced the five-year loan at around 300 basis points and subsequently syndicated most of the debt to institutional investors and credit funds.

Some of the 50 financings featured multiple loans. Blackstone sourced finance for the European direct property element of the $23 billion purchase of GE Capital’s real estate assets. The firm bought the global portfolio alongside Wells Fargo last April.

Bank of America Merrill Lynch (BAML) provided €600 million across a series of country and region-specific loans to finance properties in the UK, Italy, Spain and Central and Eastern Europe. Blended pricing across the 65-70 percent LTV loans was in the region of 290-300 bps.
The French portion of the portfolio was financed by BAML and Societe Generale. The banks provided a €330 million loan, which underwrote a significant volume of development. The sub-50 percent LTV loan was also priced around 300 bps.

BAML also financed Blackstone’s €470 million purchase of the German Kingfisher portfolio with a €335 million loan. The investment bank is understood to be considering securitising the debt.

During 2015, Blackstone sourced a series of loans to finance investments in the European logistics sector for its Logicor platform. ING and HSBC provided €400 million against French assets while Goldman Sachs provided £680 million for UK logiatics properties.

Also in the UK, BNP Paribas financed Blackstone’s £440 million acquisition of the Broadgate Quarter in the City of London from Hines and HSBC Alternative Investments . The French bank provided a 50 percent LTV loan last November.

Credit Suisse’s head of real estate finance, Derek Rich, left late last year. The bank, which has a new CEO, has been cutting jobs and putting in place a new strategy for its global markets business after posting a CHF5.8 billion loss for Q4 2015.