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Cerberus refinances three German retail assets from Project Phoenix with €63m PBB loan

Cerberus Capital Management has refinanced three retail properties in Germany acquired three years ago from Wells Fargo with a €63m senior loan from Deutsche Pfandbriefbank (PBB), the recently re-privatised German bank said in a statement.

Cerberus acquired the value-add retail-led assets – located in Bielefeld, Bonn and Konstanz – as part of the nine-strong Project Phoenix property portfolio, reclaimed through German insolvency procedures after the default of the legacy €150m senior loan extended by Wachovia in 2010. Wells Fargo acquired Wachovia in 2008.

Cerberus paid €70m to Wells Fargo for the nine-strong Project Phoenix retail property portfolio in October 2012.

The refinanced pool includes the Marktpassage Bielefeld, a shopping centre in Bielefeld.

When CoStar News reported Cerberus win of Phoenix three years ago, we reported that Cerberus had “a clear asset management play to improve the distressed secondary German retail portfolio’s value through investing in the assets, re-gearing maturing leases to improve the long-term cash flows of the properties before disposing of them piecemeal or as a portfolio to more natural long-term holders, such as income-seeking institutional investors”.

The PBB loan was signed in September 2015, the listed bank said in a statement. No LTV was given.

The three retail properties are in slightly above-average to very good locations. Cerberus plans extensive refurbishment works for the properties, and to raise the occupancy rate; some activity has already started in this respect.

For this purpose, Cerberus has retained ACREST, an experienced asset manager which specialises in retail properties. The firm has known the properties for several years.

Gerhard Meitinger, Head of Real Estate Finance Germany at Deutsche Pfandbriefbank, said: “Cerberus and pbb look back on a successful and longstanding business relationship. We are convinced that our partners will succeed in significantly enhancing the quality of the properties through the major refurbishment measures already in hand.

“This is one of the reasons why we are pleased to support this transaction as a financing partner.”

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