Europe Draws Mortgage REITs Seeking Distressed Property Deals
Bloomberg reports: Starwood Property Trust and Colony Capital, US mortgage investors formed amid an expected surge of distressed debt, are turning to Europe as banks tighten lending and sell real estate loans.
Despite the turmoil in the debt markets, the founder of Connecticut-based Starwood, Barry Sternlicht calls Europe a “fertile field.” He has made deals including a $71.5 million loan on a group of 45 properties leased by a unit of Metro AG, Germany’s largest retailer. California-based Colony, led by Thomas Barrack, invested $30 million in July for a stake in five non-performing loans backed by buildings in Frankfurt and Berlin.
The REITs are seeking transactions overseas, expecting that delinquencies will rise, and that banks will dispose of more bad debt and make fewer loans in a weakening economy.
Dan Fasulo, managing director at Real Capital Analytics said “It’s hard to find a rock that hasn’t been overturned in the US. It doesn’t surprise me that some of the major players here would turn to Europe, where there remains a lot of skeletons in the closet.”
View the full article on Bloomberg: Europe Draws Mortgage REITs Seeking Distressed Property Deals
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Posted by: Matthew Stone