Cerberus Grabs 2 Retail Property Portfolios in Germany

Affiliates of Cerberus Capital Management L.P. have entered into definitive agreements to purchase two German retail property portfolios out of receivership.

Affiliates of Cerberus Capital Management L.P. have entered into definitive agreements to purchase two German retail property portfolios out of receivership.

An affiliate of Cerberus has agreed to acquire nine shopping centers from Wells Fargo. Known as the “Phoenix” portfolio, the assets total more than 990,000 square feet of floor space. The disposition will enable Wells Fargo to remove the non-performing loans associated with these properties from its balance sheet. The insolvency administrator was BBL Bernsau Brockdorff & Partners.

Additionally, affiliates of Cerberus have purchased the “Monsoon” portfolio out of administration, which comprises ten German retail properties. The transaction was performed through a multi-level tendering procedure led by Dutch insolvency administrator Barend de Roy van Zuidewijn of the law firm AKD. Combined, the assets feature nearly 2.84 million square feet of floor space.

Both the Phoenix and Monsoon portfolios will be coordinated by ACREST Property Group, one of Germany’s leading letting companies for asset management and development of retail real estate.

“The acquisition of these portfolios further enhances Cerberus’s footprint in the German real estate market. These mutually beneficial transactions enabled the sellers to obtain fair value, while providing us with the opportunity to inject fresh capital and spearhead the turnaround of the properties,” said Lee Millstein, senior managing director at Cerberus in a news release. “Supported by ACREST’s extensive expertise and track record of success in the asset management space in Germany, we look forward to further developing and fully leasing these properties in order to drive additional value for all stakeholders.”

Stefan Zimmermann, managing partner at ACREST, added: “Managing the Monsoon and Phoenix properties further strengthens the long-standing partnership between ACREST and Cerberus. With our specialized, vertically integrated and focused approach to retail real estate management, we are ideally positioned to enhance the value of these assets through refurbishments, redevelopments and letting.”

Linklaters served as legal advisor to the Cerberus affiliate in the Phoenix transaction, while Ashurst served as legal advisor to the company’s affiliates in the Monsoon transaction.

Cerberus has been an active investor in Germany since 2002. Last year, the company acquired the 3.2 million square feet Rebound portfolio of 47 retail and mixed-use properties from FMS Wertmanagement, as well as the distressed assets of Speymill Deutsche Immobilien Company plc.

In 2011, Cerberus acquired a 9.68 million-square-foot portfolio of Metro Cash & Carry wholesale-retail properties located in the country’s urban centers. That same year, Cerberus and a co-investor listed Berlin-based GSW Immobilien AG on the Frankfurt Stock Exchange, following the successful restructuring of the company and improvement of its assets.