Commerzbank has selected four joint venture consortiums to progress through to the second round of the sales process of the Spanish commercial property lending platform, codenamed Project Octopus, from its formerly-named Eurohypo subsidiary.
- Lone Star and JPMorgan. JPMorgan is seeking to acquire the performing loan tranches and finance Lone Star’s sub and non-performing loan purchase;
- Blackstone and Deutsche Bank;
- Apollo Global Management and Santander, with financing from BAML;
- Cerberus Capital Management with financing from Credit Suisse.
Notable underbidders which did not progress to the second round include joint bids by Goldman Sachs Special Situations Fund and Starwood Capital; Kennedy Wilson and Värde Partners; and Pimco with La Caixa; as well as solo bids by AXA Real Estate and GE Capital Real Estate.
The €4.4bn Project Octopus is comprised of two almost evenly-split pools – a €2.2bn performing and a similarly-sized sub/non-performing pool.
The performing sub-pool is split into two tranches, reflecting Commerzbank’s expectation of capital recovery for each and provisioning levels. There are also around €1.3bn in sub-performing loans and €0.9bn non-performing loans.
Across the entire €4.4bn commercial property loan book there are between 60 to 70 borrower connections, including Hines, Alpha Real Trust Limited and Spanish property developer Bami, Sociedad De Centros Comerciales de España (SCCE), Metrovacesa, Realia, AXA REIM, Hines, CBRE / REEOF, GE Real Estate.
For a comprehensive list of all legacy Eurohypo Spanish loans in Project Octopus, please click here as published in Spanish newspaper Cinco Dias.
For CoStar News’ first detailed report on Project Octopus, please see here.
Lazards’ German office is running the sale of Project Octopus.
All parties declined to comment.