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Blackstone and Wells Fargo to Buy GE Capital’s Real Estate Assets

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Blackstone (NYSE:BX) and Wells Fargo (NYSE:WFC) today announced that they had signed agreements to purchase most of the assets of GE Capital Real Estate in a transaction valued at approximately $23 billion.

The transaction breaks down as follows:

  • Wells Fargo has agreed to purchase performing first mortgage commercial real estate loans valued at $9.0 billion in the United States, UK and Canada.
  • Blackstone’s latest flagship global real estate fund, BREP VIII, has agreed to purchase the US equity assets for $3.3 billion. These assets are primarily office properties in Southern California, Seattle and Chicago.
  • Blackstone’s European real estate fund, BREP Europe IV, has agreed to purchase the European equity real estate assets, for EUR1.9 billion. These consist of office, logistics and retail assets, largely in the UK, France and Spain. The logistics assets will be integrated into Blackstone’s European logistics platform, Logicor, and the retail assets into its European retail platform, Multi.
  • BREDS, Blackstone’s real estate debt fund, has agreed to purchase performing first mortgage loans in Mexico and Australia for $4.2 billion.
  • BXMT, Blackstone’s publicly traded commercial mortgage REIT, has agreed to purchase a $4.6 billion portfolio of first mortgage loans primarily in the US with Wells Fargo providing the financing. (Further details can be found in a separate release from BXMT issued simultaneously with this one.)

Eastdil Secured/Wells Fargo Securities acted as advisor to Blackstone and Wells Fargo. Simpson Thacher & Bartlett LLP acted as legal counsel to Blackstone and Dechert LLP acted as legal counsel to Wells Fargo.

GE Capital was advised by Kimberlite Group and BofA Merrill Lynch and represented by Hogan Lovells.

Mark Myers, Head of Commercial Real Estate for Wells Fargo, said, “This is an important transaction in the commercial real estate industry and Wells Fargo is pleased to be working with our colleagues at GE Capital and Blackstone. 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.”

Jon Gray, Global Head of Real Estate for Blackstone, said, “We are delighted to partner with GE on another major transaction and we thank them for their confidence in us. 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.”

These transactions are subject to normal regulatory and other approvals. The initial closings will take place in the second and third quarter of the year.

About Wells Fargo

Wells Fargo & Company (NYSE:WFC) is a nationwide, diversified, community-based financial services company with $1.7 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,700 locations, 12,500 ATMs, and the internet (wellsfargo.com), and has offices in 36 countries to support customers who conduct business in the global economy. With approximately 265,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 29 on Fortune’s 2014 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially. Wells Fargo perspectives are also available at Wells Fargo Blogs and Wells Fargo Stories.

About Blackstone Real Estate

Blackstone is a global leader in real estate investing. Blackstone’s real estate business was founded in 1991 and has approximately $81 billion in investor capital under management. Blackstone’s real estate portfolio includes hotel, office, retail, industrial and residential properties in the US, Europe, Asia and Latin America. Major holdings include Hilton Worldwide, Invitation Homes (single family homes), Logicor (pan-European logistics), SCP (Chinese shopping malls), and prime office buildings in the world’s major cities. Blackstone real estate also operates one of the leading real estate finance platforms, including management of the publicly traded Blackstone Mortgage Trust (NYSE:BXMT) .

Cautionary Statement About Forward-Looking Statements

This news release contains forward-looking statements about future transactions, business operations and events. Because forward-looking statements are based on current expectations and assumptions regarding the future, they are subject to inherent risks and uncertainties. Do not unduly rely on forward-looking statements as actual results could differ materially from expectations. Forward-looking statements speak only as of the date made, and we do not undertake to update them to reflect changes or events that occur after that date. For information about factors that could cause actual results to differ materially from expectations, refer to Blackstone’s and Wells Fargo’s reports filed with the Securities and Exchange Commission, including the discussion under “Risk Factors” in each of their Annual Reports on Form 10-K for the year ended December 31, 2014, as filed with the Securities and Exchange Commission and available on its website at www.sec.gov.

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