Blackstone Real Estate Debt Strategies (BREDS) has won a financing mandate to raise around £525m in senior and mezzanine debt to refinance £660m in matured debt, secured by Maybourne Hotel Group, which is 64%-controlled by the billionaire Barclay brothers, Sir Frederick and Sir David Barclay.
BREDS, the European real estate lending division of the global private equity firm, won the mandate – first reported by last weekend’s Sunday Times – to arrange a lending syndicate to refinance the matured debt with Barclays Bank, who financed the Barclay brothers’ purchase of the legacy £660m Anglo Irish loan from NAMA, securing the prestigious central London hotels: Claridge’s, the Connaught and The Berkeley.
Irish property developer Patrick McKillen owns the 36% equity interest in Coroin – the Maybourne parent company – which fell into NAMA’s control. McKillen has been locked in a bitter High Court legal battle with the Barclay brothers, over the ultimate ownership of the hotels which has complicated the refinancing effort.
Blackstone declined to comment.
Several real state lenders have shied away from offering term sheets because of the unresolved legal dispute.
BREDS’ mandate is understood to be purely arranging – as well as, in part, participating in – the re-financing after winning the mandate for which Eastdil Secured was appointed to source. Blackstone is not directly or indirectly backing McKillen or the Barclay brothers, CoStar News understands.
Blackstone is currently capital raising for a successor fund to 2008’s circa $4bn BREDS I, which is targeting a first close in the first quarter of next year and an eventual final close north of $3bn.
Florent Danset joined Blackstone’s BREDS earlier this month from Partners Group, with responsibility for sourcing, underwriting and executing real estate debt transactions in Europe, with the BREDS team focused on originating loans where the senior ends to where the equity is deemed fit to begin – which translates approximately from circa 50% to 80%-plus LTV.
The European BREDS team is focused on originating loans where the senior ends to where the equity is deemed fit to begin – which translates approximately from circa 50% to 80%-plus LTV, CoStar News understands.
Danset reports into BREDS managing director, Joe Pedlow, who heads a five-strong team in Europe. Globally, BREDS has more than $4bn real estate debt investments in its debut commercial real estate debt fund, raised back in 2008, with just over $3bn deployed in mezzanine and the balance in CMBS.
While BREDS will buy sub-performing loans, the team will not acquire non-performing loans or in loan-to-own strategies. Through capital recycling, Blackstone is still deploying from the 2008 fund which will likely cease once the first closing of the successor fund completes.