Wells Fargo & Co (NYSE:WFC) has entered into an agreement to acquire Commerzbank’s Hypothekenbank Frankfurt U.K. commercial real estate portfolio.
The leading commercial real estate lender in the U.S, Wells Fargo & Co (NYSE:WFC) has agreed to acquire the former Eurohypo’s U.K. commercial real estate portfolio. The transaction comprises two pools. One of the pools covers sale of £4.0 billion ($6.95 billion) commercial real estate loan book comprising high-quality institutional assets throughout the U.K. with a special focus in London.
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The second pool relates to sale of £1.3 billion ($1.96 billion) non-performing loans to Lone Star Funds.
The transaction is expected to be concluded during third quarter of 2013.
Wells Fargo, The No. 1 Commercial Real Estate Lender In The U.S.
The fourth-biggest U.S. bank, Wells Fargo & Co (NYSE:WFC), has the number one position in the U.S. commercial real estate lender space.
The transaction with Commerzbank is considered significant in the future growth of Wells Fargo’s platform. The proposed transaction will help Wells Fargo serve its corporate and commercial customers spanning roughly 700 members spread across Europe.
Wells Fargo’s primary European business lines include Global Financial Institutions, Global Banking, Global Transaction Banking, Capital Finance, Commercial Real Estate, Corporate Trust, Asset Management and Securities.
Wells Fargo’s agreement with Commerzbank involves all interest-rate and currency hedging derivatives, as well as the entire operational business of Hypothekenbank Frankfurt in the UK.
Hypothekenbank Frankfurt Has 20-Year History In London
Last summer, Commerzbank renamed U.K staff Eurohypo as Hypothekenbank Frankfurt.
Bill Vernon, executive vice president and group head for Wells Fargo commercial real estate led the acquisition team for Wells Fargo. He said: “Hypothekenbank Frankfurt’s 20-year history in London, their recognition as a market leader in the commercial real estate industry, and our similar approaches to building quality assets and providing outstanding client service all add up to a great strategic expansion opportunity for Wells Fargo’s UK commercial real estate business. This transaction, in combination with Wells Fargo’s long standing real estate expertise, will help create a best-in-class commercial real estate platform in the U.K.”
Wells Fargo & Co (NYSE:WFC) named Hypothekenbank Frankfurt industry veteran, Max Sinclair, as head of its London Commercial Real Estate office.
Several other Hypothekenbank Frankfurt employees are likely to become Wells Fargo & Co (NYSE:WFC) team members, with several of them set to join the London Commercial Real Estate team.
Last week, despite recent interest rate increase discouraging borrowers from refinancing their mortgages in the U.S, the largest home lender in the U.S., Wells Fargo, recorded its 14th-consecutive increase in quarterly profit and ninth-straight record report.