Another distressed portfolio of secondary German retail property is being sold, by Wells Fargo. Cerberus is carrying out due diligence to buy Project Phoenix, nine properties in west German towns and cities totalling almost 1m sq ft, for less than the latest €70m valuation. The vacancy rate in the portfolio is about 20%.
The US private equity firm hopes to complete the deal before the end of the year. Wells Fargo, which inherited the €150m loan through its takeover of Wachovia, enforced after it defaulted and matured in 2010. The assets were put up for sale in May through its subsidiary Eastdil Secured, and Jones Lang LaSalle.
Speaking at the EXPO Real exhibition and conference in Munich this month, Tuuli Krane, an associate director of Fitch Ratings in Germany, said just 42.7% of Germany’s €30bn CMBS market consists of performing loans. Krane was on the panel at the ‘Talking real estate: finance’ session.