Cerberus outbids Morgan Stanley for Secur retail portfolio

A report from specialist property publisher CoStar suggests that, yet again, Cerberus Capital Management has pipped out rival Morgan Stanley in the bidding on a portfolio of Germany commercial properties.

The Phoenix portfolio consists of nine different retail properties with about 20 percent total vacancy rate, which were put on the market by the administrator following the insolvency of the Secur-Gruppe in Wiesbaden, on instructions from lender Wells Fargo bank. The properties all include a residential element, and generate an annual rental income of €10.5m. They are currently managed by Treureal and Estama.

As CoStar report, Cerberus is supposed to have bid somewhat north of €65m to edge out Morgan Stanley, whose final bid was under €60m. The CEO of Redos Real Estate, Oliver Herrmann, long-time joint-venture partner and asset manager of Morgan Stanley, commented, “We weren't prepared to pay any more than that, as beyond that the risk was too high.”

Losing out in the final stretch is becoming somewhat of a habit for Morgan Stanley, it seems, with Cerberus now outbidding Morgan Stanley for the third time in a row, again offering a sizeable premium over the second-best bid.  The recent Rebound portfolio of 47 retail sites sold by Hypo Real Estate went to Cerberus, as did the so-called Blue portfolio, consisting of 42 retail outlets fully-leased to the Metro Group.

The Phoenix portfolio is made up of retail properties located across Germany, with a vacancy rate of about 20 percent.  Total annual rental income is €10.5m.  The properties, all of which include a residential element, are managed by asset managers Treureal and Estama.