Wells Fargo to sell German defaulted loan properties

Wells Fargo is selling nine secondary German properties valued at €100m as a result of its enforcement of a €150m senior loan made by Wachovia.

The US bank inherited the  defaulted loan, which has matured, when it bought Wachovia in 2008. Its subsidiary, Eastdil Secured, is marketing the 19% vacant Project Phoenix portfolio, along with Jones Lang LaSalle. Potential buyers “have signed confidentiality agreements and are about to enter the data room,” said a Wells Fargo source.

The latest valuation of the assets reflects a 50% fall since 2007. The portfolio comprises six shopping centres, one office and retail building, a retail warehouse and a mixed-use scheme spread across cities in western Germany, providing a gross annual income of €10.5m.

Wells Fargo, the largest US real estate lender, has begun lending in the UK again, but only to existing clients. It is in a club with Deutsche Pfandbriefbank and HSBC that  has just funded Blackstone’s £265m acquisition of a London & Stamford logistics portfolio. It also refinanced Westbrook Partners’ 123 Buckingham Palace Road in Victoria with MetLife late last year.