GE is selling a portfolio of commercial real estate loans and assets to Blackstone and Wells Fargo for $23bn (鈧�21.7bn).
The bulk of GE鈥檚 assets from its GE Capital Real Estate arm will be offloaded as the firm focuses on its industrial businesses. The deals are due to close in the second and third quarter.
GE said it has letters of intent from other buyers for an additional $4bn of commercial real estate assets.
The firm said GE Capital had been an 鈥渋mportant part of the history of GE鈥�.
鈥淗owever, the business model for large, wholesale-funded financial companies has changed, making it increasingly difficult to generate acceptable returns going forward.鈥�
Wells Fargo has agreed to take GE Capital鈥檚 performing first-mortgage commercial real estate loans, valued at $9bn. The loans are originated in the US, UK and Canada.
Mark Myers, head of commercial real estate for Wells Fargo, said the portfolio is a 鈥渟trong addition鈥� to its commercial real estate platform in the US, UK and Canada.
Blackstone, meanwhile, will pay $3.3bn for GE Capital鈥檚 US equity assets on behalf of its Blackstone Real Estate Partners VIII fund. The portfolio is made up of mainly office properties in Southern California, Seattle and Chicago.
Blackstone鈥檚 European real estate fund, Blackstone Real Estate Partners Europe IV, has agreed to pay $1.9bn for GE Capital鈥檚 European equity real estate assets. The office, logistics and retail assets are largely in the UK, France and Spain.
The logistics assets will be taken by Blackstone鈥檚 European logistics platform, Logicor, and the retail assets will go to its European retail platform, Multi.
BREDS, Blackstone鈥檚 real estate debt fund, will take on performing first mortgage loans in Mexico and Australia for $4.2bn.
BXMT, Blackstone鈥檚 publicly traded commercial mortgage REIT, will purchase a $4.6bn portfolio of first-mortgage loans. The purchase of the portfolio of mainly US assets is being financed by Wells Fargo. The 82 first mortgage loans are secured by assets in core and target markets, including the US (68%), Canada (15%), the UK (10%) and Germany (7%).
