Apollo Global Management LLC, a New York-based private-equity firm, agreed to pay $1.2 billion for distressed property loans held by Credit Suisse Group AG, according to a person with knowledge of the deal.
The mortgages are backed by buildings in Europe, said the person, who asked not to be named because the agreement hasn’t been made public.
Demand for commercial property loans has increased as banks around the world strengthen balance sheets and begin to sell non-core property assets. Private-equity firms including TPG Capital and KKR & Co. have vied for ING Groep NV’s real estate investment unit, according to people familiar with the matter. Morgan Stanley said last month that European real estate stocks will probably outperform the broader market into 2011.
Apollo last month completed the purchase of the real estate investment unit of Citigroup Inc., adding more than $3 billion to its assets under management.
The Wall Street Journal reported the Credit Suisse deal earlier today. Credit Suisse has already written down the loans to below their face value of $2.8 billion, the Journal said.
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