The auction of Breevast's 55-property strong Dutch portfolio will go ahead as planned on 15 May after the Amsterdam-based property company lost a court injunction to prevent the sale by US hedge fund Davidson Kempner.
New York-based investment firm Davidson Kempner Capital Management took full control of the Mesdag Delta CMBS in which the properties are tied up in February this year and subsequently proceeded with plans to sell the 55 underlying properties which are reportedly valued at some €550 mln.
The portfolio includes Tommy Hilfiger's former head office in Amsterdam and the NH Hotel on the Jaarbeursplein in Utrecht (pictured).
At the market peak, in late 2006, Breevast refinanced the property portfolio for €680 mln, then securitised it and sold the units to investors in July 2007, largely via the Irish stock exchange. Five years later, when the CMBS came to maturity in December 2016, Breevast failed to pay back investors and Situs was appointed as special servicer for the CMBS structure.
The special servicer in February opted for a sale of the assets.
In a statement issued to announce the court proceedings in March, Breevast said that the real estate portfolio is owned by ‘various group companies of Breevast' and the financing is a non-recourse loan ‘for which Breevast is not the guarantor’.
The company claimed that Davidson Kempner had announced on buying the loan that it would not auction the properties. Breevast continued: ‘The real estate portfolio has an excess value compared to the loan. Breevast opposes the intention of Davidson Kempner to appropriate the surplus value. Breevast opposes the (manner of) execution.’
The portfolio is to be sold by BOG Auctions in three lots. Bidders can also make an offer for the entire portfolio. BOG Auctions, based in the Dutch city of Amersfoort, specialises in organising online and offline auctions of real estate on behalf of banks, mortgage holders, notaries and other groups.
Breevast ran into difficulty in recent years because of loan defaults caused by a sharp drop in the value of the underlying assets. The 55 assets for sale cover nearly 460,000 m2 of total space and consist of 18 office buildings, 16 industrial properties, nine shopping centres, six high street stores, a hotel, two residential properties and a plot of land.
Breevast hit the headlines last year after its owner Frank Zweegers was arrested in Italy on allegations of fraud.
He was released without charge after being investigated for allegedly bribing a former Belgian police chief in 2013 to lobby for the national police headquarters to move to another building in Brussels, owned at the time by Breevast. The police section of that building, the RAC complex, has since been sold to Hannover Leasing and China’s Gingko Tree.
Dutch and Belgian media reports alleged Zweegers paid police chief Glenn Audenaert tens of thousands of euros in bribes at the time.
Zweegers is said to be one of the richest people in the Netherlands with an estimated fortune of €245 mln, according to local business magazine Quote.
At the time of his brief arrest, Breevast was reportedly in talks to sell the Finance Tower in Brussels, which forms part of the RAC complex, to Derek Quinlan for €1.3 bn. The Dutch company acquired the 31-storey, 200,000 m2 building in 2001 for €310 mln and subsequently spent €300 mln on its renovation.