Colony Capital, the global private equity firm founded by Thomas J. Barrack, Jr in 1991, has won the €215m Project Alpha portfolio from Lloyds Banking Group, in an all-cash acquisition which closed last Friday.
Project Alpha comprised three Spanish loans secured against office and retail properties in Madrid and Murcia, and was the smallest subset of Lloyds €1.5bn Project Hampton portfolio, which also includes projects Bravo and Charlie.
Colony beat underbidder HIG Capital, while Blackstone and the Davidson Kempner and Bank of America Merrill Lynch bids were withdrawn, CoStar News understands.
This is Colony’s first major European NPL win from Lloyds’ programme of legacy loan de-leveraging, and indeed, Colony’s appearance in the shortlist was its first since making the final three on Project Royal, which ultimately traded to Lone star almost two years ago.
Colony’s investment strategy for the loan’s is likely to be the conventional private equity formula enforcing over the properties, where possible, then stabilising the assets through lease re-gearing, lettings and investing capex to repositions assets, where applicable.
Final bids for the two much larger remaining subpools of Project Hampton, projects Bravo and Charlie, are due 26 November.
There are also two separate, but overlapping, five-strong shortlists for the €750m Project Charlie portfolio, which is comprised of German and French property loans, and the circa €500m Project Bravo Scandinavian loan portfolio.
CoStar News understands that Blackstone, Cerberus, Deutsche Bank and Lone Star have each made the second round shortlists for both projects Charlie and Bravo, while Apollo and Colony Capital is through to one of the two.
Projects Charlie and Bravo, therefore, could still either trade separately or together.
Deloitte is selling Project Hampton for Lloyds.
All parties declined to comment.