Walton Street Capital LLC, a real estate private-equity firm, is poised to hand back to lenders a portfolio of West Coast industrial properties, Crain’s Chicago reported without say how it obtained the information.
Walton Street, whose managing principal is billionaire Neil Bluhm, bought the properties for $2.9 billion at the peak of the real estate market in 2007, Crain’s reported today. About $2.5 billion of loans on the Chicago-based firm’s portfolio come due June 8, and the properties are worth so much less than the debt that it makes sense to walk away, the newspaper said.
Blackstone Group LP, the world’s largest private-equity firm, has acquired almost $600 million of debt on the buildings, putting it in a position to take control if the borrower defaults.
The surrender comes just Walton Street is trying to raise $2 billion for its seventh and largest fund, Crain’s reported.