Cerberus to Buy Two German Real Estate Portfolios

Cerberus Capital Management said Monday it has acquired two portfolios of German real estate properties. Financial terms were not announced. First, Cerberus has agreed to buy a portfolio of nine shopping centers, which include a combined floor space of 92,000 square meters, from Wells Fargo. Cerberus has also agreed to buy ten German retail properties, with an have an aggregate floor space of 263,677 square meters, out of administration.


FRANKFURT, Germany and LONDON, July 22, 2013 /PRNewswire/ — Affiliates of Cerberus Capital Management, L.P. (“Cerberus”) have acquired two portfolios of German real estate properties. An affiliate of Cerberus has entered into definitive agreements to acquire a portfolio of nine shopping centers, (the “Phoenix” portfolio), from Wells Fargo. Additionally, affiliates of Cerberus have entered into a definitive agreement to purchase ten German retail properties (the “Monsoon” portfolio) out of administration.
The Phoenix portfolio includes a combined floor space of 92,000 square meters with properties located across Germany. The private sale, following a competitive process, enabled Wells Fargo to remove the non-performing loans associated with these properties from its balance sheet. The insolvency administrator was BBL Bernsau Brockdorff & Partners. The ten retail properties in the Monsoon portfolio, which Cerberus affiliates successfully purchased on an all-cash basis through a multi-level tendering procedure led by Dutch insolvency administrator Barend de Roy van Zuidewijn of the law firm AKD, have an aggregate floor space of 263,677 square meters.
ACREST Property Group, one of the leading letting companies for asset management and development of retail real estate inGermany, has been engaged to coordinate asset management, letting and property development for properties in both thePhoenix and Monsoon portfolios. With this engagement, ACREST will build on the success ACREST and Cerberus achieved working together on various portfolios over the last few years, amongst others Woolworth and Metro Cash & Carry stores and the Rebound portfolio. ACREST manages approximately €3.7 billion in assets in Germany, including nearly 400 properties totaling 2.5 million square meters of floor space.
Lee Millstein, Senior Managing Director at Cerberus, stated, “The acquisition of these portfolios further enhances Cerberus’s footprint in the German real estate market. These mutually beneficial transactions enabled the sellers to obtain fair value, while providing us with the opportunity to inject fresh capital and spearhead the turnaround of the properties. Supported by ACREST’s extensive expertise and track record of success in the asset management space in Germany, we look forward to further developing and fully leasing these properties in order to drive additional value for all stakeholders.”
Stefan Zimmermann, Managing Partner at ACREST, added, “Managing the Monsoon and Phoenix properties further strengthens the long-standing partnership between ACREST and Cerberus. With our specialized, vertically integrated and focused approach to retail real estate management, we are ideally positioned to enhance the value of these assets through refurbishments, redevelopments and letting.”
Cerberus has been an active investor in Germany since 2002. In 2012, Cerberus acquired the 300,000 square meter Rebound portfolio of 47 retail and mixed-use properties from FMS Wertmanagement, which resulted in significant capital improvements to redevelop those assets. Earlier that year, Cerberus acquired the distressed assets of Speymill Deutsche Immobilien Company plc, in a transaction that injected capital for asset improvements and restructured the company’s bank loans. In 2011, Cerberus acquired a 900,000 square meter portfolio of Metro Cash & Carry wholesale-retail properties located in urban centers throughout Germany. In Germany’s largest initial public offering of 2011, Cerberus and a co-investor listed Berlin-based GSW Immobilien AG on the Frankfurt Stock Exchange following the successful restructuring of the company and improvement of its assets.
Linklaters served as legal advisor to the Cerberus affiliate on the Phoenix transaction. For the Monsoon transaction, Ashurst served as legal advisor to the affiliates of Cerberus.
About ACREST Property Group GmbH
ACREST Property GmbH specializes in German retail properties. The company was established in Berlin in 2005 and with its over 120 employees currently manages real estate assets worth EUR 3.7 billion and measuring a total of 2.5 million square meters. The areas of investment, technical management, asset management, property management, center management, consulting, and retail letting are integrated under one roof. ACREST pursues a holistic approach to managing retail properties as a one-stop shop for real estate investors. The approximately 400 properties currently managed by ACREST include, among others, around 90 Woolworth properties in Germany and Austria, 43 Metro Group locations, various specialist store centers, as well as a large number of retail properties in inner city locations. Examples of current project developments are the Opel Forum in Russelsheim measuring around 36,000 sqm and Staufen Galerie in Göppingen with around 30,000 square meters of leasable space.
About Cerberus Capital Management, L.P.
Established in 1992, Cerberus Capital Management, L.P. is one of the world’s leading private investment firms. Cerberus has more than US $20 billion under management invested in four primary strategies: distressed securities & assets; control and non-control private equity; commercial mid-market lending and real estate-related investments. From its headquarters in New York City and large network of affiliate and advisory offices in the US, Europe and Asia, Cerberus has the on-the-ground presence to invest in multiple sectors, through multiple investment strategies in countries around the world.