Gagfah SA (GFJ), the European real estate company majority-owned by Fortress Investment Group LLC (FIG:US), plans to sell as many as 38,000 apartments in Dresden, Germany, two people with knowledge of the matter said.
The homes are valued at about 1.8 billion euros ($2.37 billion) and make up about a quarter of Gagfah’s holdings, according to company filings. Gagfah is due in May 2013 to pay 1.1 billion euros borrowed when it bought the properties, according to one of the people.
The homes are owned by Gagfah’s Woba Dresden unit, which bought them from Dresden’s government for 1.75 billion euros in 2006. Investment bank Leonardo & Co., a unit of Italy’s Gruppo Banca Leonardo, is advising on the sale, the people said.
The plan was earlier reported by the Financial Times Deutschland. The company declined to confirm the report.
“We are a real estate company and we sell and buy apartments,” said Dirk Schmitt, a Gagfah spokesman. “Everything is an option.”
Selling the entire portfolio would be difficult and Gagfah may break it up even though it would need permission from the city of Dresden to do so, according to one of the people. No approval is necessary if the assets are sold to a single buyer, the person said.
Gagfah has an additional 2.1 billion euros in debt due in August 2013, one of the people said.
Fortress Investment Group, based in New York, owns 61 percent of Gagfah, which has its headquarters in Luxembourg and operates in Germany.
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