GE Capital Sheds Massive Mortgage Portfolio

GE Capital is giving other investors a piece of its $2.3 billion pie.
One Financial Square 32 Old Slip

One Financial Square, 32 Old Slip

GE Capital has sold a national portfolio of performing, sub-performing and non-performing mortgage loans with an unpaid principal balance totaling $2.3 billion, it was announced Monday by CBRE Capital Markets’ National Loan Sale Advisory Group, which was the exclusive advisor to GE Capital. The portfolio consisted of 313 loans secured by more than 450 properties throughout the United States.

Three separate buyers were involved in the transaction. Deutsche Bank AG purchased the largest portfolio, which comprised 46 performing and sub-performing loans with an unpaid balance of $1.59 billion, or about 69 percent of the total.

Waterfall Asset Management, of New York, bought a portfolio of 265 small-balance loans from GE Capital’s business property lending unit totaling $565 million in unpaid principal balances. Waterfall is an SEC-registered specialist credit manager focused on high-yield asset-backed securities and real estate and consumer debt investment.
And Newcastle Investment Corp. purchased two performing loans with a total unpaid balance of $157 million, secured by a portfolio of golf courses across the country. (In a separate announcement, Newcastle described its part of the transaction as “the repurchase of $157 million face amount of third party golf debt at a price of 90 percent of par or $141 million….”)

Both GE Capital and Deutsche Bank declined to comment on the transaction, which was one of the largest U.S. portfolio loan sales since the credit crisis, according to CBRE.

Three of the portfolio’s largest loans were on 32 Old Slip, also known as One Financial Square in Manhattan, a 1.16-million square-foot, 36-story office building; the JW Marriott Houston, at 806 Main St. in Houston; and the MeriStar Portfolio, a CBRE spokesperson told Commercial Property Executive. (The Blackstone Group purchased MeriStar Hospitality Corp. nearly 10 years ago.)

Patrick Arangio, vice chairman, and Jack Howard, senior vice president, of CBRE’s Midtown Manhattan office, exclusively advised GE Capital.

“The robust interest from the market, both international and domestic, was a testament to the quality of the offering and the continued appetite for high-quality mortgage loans in the secondary market from the most sophisticated of institutions,” Arangio said in a prepared statement.