Walton Street Seeks Buyer for 95 Industrial Assets Purchased for $2.8B in 2007
Bloomberg BusinessWeek reports: Walton Street Capital LLC hired CBRE Group Inc to sell 95 industrial properties that it acquired for about $2.8 billion in 2007, when CRE prices peaked, as a debt payment on the buildings comes due in June.
Property owners have had difficulty refinancing debt amid the decline in US real estate values from their highs and upheaval in the commercial mortgage-backed securities market since July. Walton Street has a $2.45 billion loan repayment deadline in June. Blackstone Group LP, the world’s largest private-equity firm, has acquired almost $600 million of debt on the buildings, putting it in a position to take control if the borrower defaults.
“Walton Street would have to come up with a lot more money to hang onto this,” said Dan Fasulo, managing director at Real Capital Analytics Inc., a global commercial property research firm in New York. “The problem is they bought this portfolio very much at the height of the market, and I’m not sure these assets are worth that anymore.”
Walton Street paid about $120 per square foot for the CalWest properties, which total 23.4 million square feet (2.2 million square meters) and are mostly located in California. While it’s difficult to generalize, Fasulo estimates industrial assets are now valued at about $80 to $100 per square foot.
“They’re actually fortunate that most of the assets are in California, where there is significant demand,” Fasulo said. “They’re hoping someone will come along and see the value and help them work out of a difficult situation.”
View the full article on Bloomberg BusinessWeek: Walton Street Seeks Buyer for 95 Industrial Assets Purchased for $2.8B in 2007
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