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Deutsche Bank delays $1.5B CMBS deal tied to HQ

Transaction among slew of deals stalled by volatility after Ukraine invasion

Christian Sewing, chief executive officer, Deutsche Bank, in front of 1 Columbus Circle (Getty Images, OptimumPx, Public domain, via Wikimedia Commons/Photo Illustration by Steven Dilakian for The Real Deal)
Christian Sewing, chief executive officer, Deutsche Bank, in front of 1 Columbus Circle (Getty Images, OptimumPx, Public domain, via Wikimedia Commons/Photo Illustration by Steven Dilakian for The Real Deal)

A CMBS deal worth nearly $1.5 billion and tied the Deutsche Bank Center was temporarily scuttled after Russia’s invasion of Ukraine threw markets for a loop, sparking fears that more deals could be put on hold.

The single-asset, single-borrower CMBS deal at Deutsche Bank’s new Columbus Circle headquarters was postponed last week due to market weakness, Bloomberg reported. The securitization financing was backed by GIC, Singapore’s sovereign wealth fund, and the Abu Dhabi Investment Authority.

The transaction isn’t dead, people close to the deal told Bloomberg, but will be revived once market conditions improve.

The transaction is among a slew of stalled deals that could grow larger if market volatility persists. Bloomberg reported about 10 companies delayed investment-grade bond sales on Monday for similar reasons. Additionally, Fannie Mae recently postponed a sale of bonds backed by prime mortgages.

“There were also whispers of other CMBS deals being put on pause as well as in other securitized markets including credit risk transfer and asset-backed securities,” said a report from JPMorgan Chase, per Bloomberg.

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The market for CMBS deals notched a banner year in 2021.

Private-label CMBS issuance surged to $109.1 billion in the United States last year, a 95 percent year-over-year jump, according to a report from Trepp. It was the highest level recorded since 2007, before the global financial crisis caused the market to collapse.

Deutsche Bank, a German banking giant, agreed to lease 1.1 million square feet at the Related Companies building in Columbus Circle in 2018. In leaving its property at 60 Wall Street, the bank’s footprint shrank by 30 percent.

The building formerly known as the Time Warner Center was renamed in May the Deutsche Bank Center in honor of a tenant that will bring more than 5,000 employees to the two-tower complex. The banking giant said last year employees would be allowed to work remotely up to three days a week.

[Bloomberg] — Holden Walter-Warner

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