CR Investment Management (CR) has won the 127-strong Project Sunrise German retail portfolio for a price believed to be north of €350m, which will see note holders in the outstanding securitised Talisman 6 CMBS loan fully repaid.
CoStar News understands that CR acquired the portfolio through Sunrise Properties UK Limited, an investment vehicle separately owned by CR’s shareholders and majority financed by Swiss-based HFS Helvetic Financial Services.
CR, which will act as asset and investment manager to Sunrise, closed the transaction this afternoon. Cerberus was the underbidder.
Project Sunrise is comprised of mainly commercial real-estate assets across prime locations in Germany including Gloria Galerie retail complex in the heart of Berlin, two shopping centres in Wilhelmshaven and Solingen and department stores in Brühl, Euskirchen and Koblenz.
Hatfield Philips International (HPI), the special servicer on the defaulted Orange loan, instructed JLL to sell the German property portfolio in August, which is one of six remaining securitised loans in the fruit-themed Talisman 6 CMBS.
The Orange whole loan is comprised of a remaining €335.48m senior loan balance, in the ABN Amro-issued Talisman 6 CMBS, and a €40.23m B-Loan which was previously owned by Blackrock in its Anthracite CRE CDO.
CR’s €350m purchase price will fully repay all Talisman 6 note holders and the majority of the B-Loan, and reflects a sub 10% discount on the €375.7m unpaid whole loan balance. The portfolio was last valued at €394.9m by BNP Paribas Real Estate in May 2012, based on the original slightly larger 142-strong portfolio.
The achieved price comes in at the upper end of HPI’s broad estimation of net recoveries for the original portfolio of between €300m and €380m.
CR, the independent pan-European financial advisor, asset manager and investor, founded by Torsten Hollstein, Claudius Meyer, Stephen Benson and Jacob Lyons in 2004, will acquire Project Sunrise all cash and is expected to seek finance in due course.
Former owner Treveria lost control of the portfolio in October 2012 after HPI declined to grant the specialist German retail property investor a second 12-month extension on the Orange Loan – also known as the Treveria Silo E Portfolio – after LTV and occupancy targets to secure the extension were not met.
“In our view any buyer is likely to look on the centre as a ‘core plus’ asset, and look to add value by investing to improve the tenant mix to optimise the very strong physical location,” wrote Deutsche Bank CMBS research analysts Paul Heaton and Conor O’Toole in a research note dated 8 October.