Castlelake, FFIRE win out in recent NPL and distressed sales

Two other low-key deals attracted our attention recently, both involving companies known to be very discrete about their operations. In a sizeable transaction, US distressed asset specialist Castlelake bought a German retail portfolio comprising 68 properties across the country, while Oaktree Capital sold off an office portfolio of six properties from an NPL package.

In a deal already completed, Retail Properties Investment Trust (RPIT), a joint venture between the Marcol Group in London and New York investment manager Marathon Asset Management, sold Project Gravity (comprising 68 grocery-anchored retail properties in Germany) to a venture lead by Castlelake, in a combined share and debt deal. The London branch of Credit Suisse contributed with financing.

The packet also includes the Dessau-Center in the city of Dessau. In 2013 Marathon bought the financing of the Gravity-Portfolio from loan agreements as a part of the Chamonix-Portfolio by Lloyds Banking Group. This transaction forms part of a larger €300m disposal of Marcol's remaining German retail holdings.

Meanwhile, privately-held Berlin-based FFIRE Immobilienverwaltung bought a distressed office portfolio of six assets with 34,000 sqm in Ulm (2), Bochum, Neuss, Hattingen and Freiberg bei Stuttgart, for a figure "in the mid-double digit millions". The properties, each between 18 and 50 years old and nearly 50% vacant, originally belonged to diverse private equity funds which become distressed, prompting owner and creditor Oaktree Capital Management to sell in a process managed by Munich-based BGA Invest.

The deal represents turnaround specialist FFIRE's third deal in Germany brokered by BGA, after buying a more than 1000-unit residential portfolio in 2011, and a mixed office and retail portfolio in about the same euro volume in 2015.  According to BGA Invest's CEO Marco Schlottermuller, BGA has a database of more than 12,000 potential investors, and focuses on structured sales processes for residential, office and retail property portfolios, and says it has conducted sales valued at more than €2bn since its founding in 2006.