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Backstory here.
Recent developments here:
http://blogs.wsj.com/deals/2011/08/19/want-a-real-estate-loan-ring-goldman-sachs/
Goldman Sachs Group’s $2.5 billion mezzanine lending fund completed its largest deal to date, teaming up with an Asian sovereign-wealth fund on a $481 million loan to Blackstone Group.
The loan is primarily for the private equity giant’s recapitalization of a 2006 acquisition, the $9 billion deal for Blackstone and Brookfield Properties to buy Trizec Properties Inc., a real estate investment trust. The recent refinancing was related to 21 properties, almost all in California.
Later we read:
Goldman’s partner on the Blackstone loan was GIC, the giant Singapore sovereign wealth fund.
In trying to discover what sort of properties Trizec Properties Inc has in California, I ran across this:
http://articles.latimes.com/2006/jun/06/business/fi-trizec6
Trizec’s Los Angeles buildings include Bank of America Plaza, Figueroa at Wilshire and Ernst & Young Plaza in downtown Los Angeles. Among Trizec’s office properties on the Westside are World Savings Center in Brentwood and Westwood Center in Westwood.
In an attempt to discover more about this sovereign wealth fund, I ran across this:
http://news.xinhuanet.com/english2010/business/2011-08/07/c_131034311.htm
SINGAPORE, Aug. 7 (Xinhua) — The Government Investment Corporation (GIC), one of the two sovereign wealth funds of Singapore, said it was following the latest developments related to the U.S. credit rating.
A spokesperson for the company said that it takes a long-term perspective for its investments and that it is closely following any developments that could affect the investment outlook, including the U.S. credit rating and similar developments in Europe, local daily Lianhe Zaobao said on Sunday.
About 33 percent of the investment portfolio of GIC was in United States as of March 31, down from 36 percent a year earlier.
So. The government of Singapore is now the landlord for Zombie Bank Plaza in LA?
6 Comments
Good work Athena, good set of links, Rec’d.
Why the hell would you want to acquire a property with Bank of America as the anchor? And in this market it is unlikely that if the U.S.’s largest home mortgage/commercial/# employees bank goes down (which now seems inevitable) that you could replace them with another bank.
I wonder if the original value of the loans extended really was 9 billion, or if some sort of a write down is involved here? Otherwise, absent something else nefarious going on that we are unaware of, why purchase real estate at 2006 book value? Even California prime stuff has got to worth a minimum 25% less now.
Please forgive, but change your header to read “Col o nization.”
Doh!, on the “o”. lol. Thanks.
I bet there was a write down. From the little I know about sovereign wealth funds, they like fire sales. And BOA, well…
Perhaps they’re planning on converting the space into a Ramen noodle factory to provide the local population with affordable sustenance? That’s what I’d do if I were them, anyway.
Hmm…
http://www.reuters.com/article/2009/05/22/us-temasek-bankofamerica-idUSTRE54L17Q20090522
(both Temasec and the GIC are run by the government of Singapore.)
Maybe someone knows someone who knows something about the US government stepping in to protect California, prop up commercial real estate market to stop the bottom from falling out…presto…guaranteed profit when the government buys it for 125 cents on a dollar
Goldman Sachs makes a bundle on the commission twice…
Life imitates dystopian fiction. In Neal Stephenson’s novel Snow Crash, the U.S. government has sold off most of its assets to foreigners, who operate what amount to franchised city-states.