Blackstone’s BREDS Acquires $1B Mortgage Portfolio from Germany’s PBB

Blackstone Real Estate Debt Strategies (BREDS) has acquired a $1 billion performing senior mortgage loan portfolio from German real estate lender Deutsche Pfandbriefbank (PBB) in an all-cash deal.

The portfolio includes 11 loans backed by cash-flowing multifamily, office, and hospitality assets in the U.K. and U.S. originated by PBB.

“We are excited to acquire this diversified portfolio of performing loans across property sectors and geographies, on behalf of our BREDS investors,” Steve Plavin, senior managing director, BREDS, said. “We have established ourselves as a trusted counterparty for financial institutions, such as PBB, as they look to optimize their balance sheets.”

PBB stated last week that its first-quarter pre-tax earnings increased marginally to €34 million ($37 million), up from €32 million ($35 million) in the first quarter of 2023, and that it was focusing on active balance sheet management and selling assets from its non-core portfolio.

Blackstone is the world’s largest owner of commercial real estate, with $339 billion in assets under management, and it has created or purchased more than $190 billion in real estate loans and securities since the launch of its real estate credit division.

BREDS and Blackstone Real Estate Income Trust, Inc. (BREIT) have recently acquired a 20% stake in Signature Bank’s $17 billion commercial real estate debt portfolio, joining the Canada Pension Plan Investment Board and Rialto Capital. The portfolio includes more than 2,600 first mortgage loans on retail, market rate multifamily, and office properties primarily in the New York metropolitan area.

Jones Day served as legal adviser to BREDS. King & Spalding served as legal adviser to PBB.

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