Blackstone Group and Wells Fargo have closed on their joint purchase of General Electric‘s real estate debt and equity assets in a deal valued at roughly $23 billion, the two companies announced today. The transaction comes as GE looks to shed its banking operations over the next two years and return to its industrial core business.
The deal also marks the biggest real estate transaction since the beginning of the financial crisis and one of the largest deals ever for Blackstone, which plans to acquire more than half of the assets.
Wells Fargo has agreed to buy $9 billion of performing first mortgage commercial real estate loans for properties in the U.S., U.K. and Canada.
“This is an important transaction in the commercial real estate industry,” the San Francisco banking giant’s head of commercial real estate, Mark Myers, said in prepared remarks. “The portfolio of performing loans we’ve purchased is a strong addition to our commercial real estate platform in the United States, the United Kingdom and Canada, which are all active lending markets for us.”
Blackstone’s commercial mortgage REIT, BXMT, will purchase a separate $4.6 billion portfolio of first mortgage loans on properties primarily located in the U.S. with Wells Fargo to provide financing for the acquisition.
Blackstone’s latest global real estate fund, BREP VIII, will purchase $3.3 billion in U.S. equity assets consisting mostly of office properties in Southern California, Seattle and Chicago.
The private equity giant’s European real estate fund, BREP Europe IV, has agreed to purchase GE’s European equity assets for €1.9 billion ($2 billion), while its real estate debt fund, BREDS, will purchase performing first mortgage loans in Mexico and Australia for $4.2 billion.
“We are delighted to partner with GE on another major transaction and we thank them for their confidence in us,” Blackstone’s global head of real estate, Jonathan Gray, said in prepared remarks. “We also thank Wells Fargo for our longstanding relationship, and for their swift execution on this investment. This transaction clearly demonstrates the unique scale and reach of our real estate platform.”