The situation: Tenant insolvencies plus refinancing shock
The SPV held 11 properties (mixed: logistics halls, light-industrial, smaller office buildings) in the DACH region. Asset value per last external valuation 2022: €92M. After tenant insolvencies (two major tenants from logistics and retail) and 2024 valuation adjustment: ~€85M.
Financing structure: syndicated loan from four banks originally €58M nominal. Residual debt 2024: €38M, including a €12M fixed-rate tranche for Q3 2024 refinancing. The valuation deterioration produced loan-to-value above 100% at three of the four banks.
The SPV sponsors (a German family office with a real-estate focus) could neither structure the refinancing nor inject further equity. The banks raised the question of an orderly solution in mid-2024 — the alternative would have been realisation of the security with further expected valuation discounts and market-disturbance effects.
What we did: 9-month workout with bank consortium
Phase 1 (months 1–3): Mandate by sponsors and bank consortium. Joint restructuring framework. Tactical takes over the SPV via share deal from the sponsors (for a symbolic amount), at the same time a restructuring framework agreement is concluded with the bank consortium: provisional standstill, joint external valuation, defined workout milestones.
Phase 2 (months 4–6): Asset valuation and portfolio segmentation. External re-valuation of all 11 properties by two independent appraisers. Segmentation into three categories: Core (5 properties with stable tenant situation, hold), Optimisation (4 with partial vacancy, hold and re-let), Sale (2 with structural weakness, dispose).
Phase 3 (months 7–9): Bank settlement. Structured sale of the 2 disposal properties (proceeds: €17M). Negotiation of the bank ratio on residual debt: 0.68 (banks receive €25.8M of €38M), with transfer of the remaining 9 properties to a new Tactical holding structure with new financing through two of the four former lenders. The two non-participating banks are bought out.
Operational result: 9 properties under Tactical ownership, bank debt reduced to €0 (via settlement and disposal proceeds), new financing with a long-term fixed-rate tranche.
Signature element: Bank consortium instead of single-bank negotiation
Restructuring four banks in a consortium is structurally harder than a single-bank relationship — but in NPL workouts the only scalable way.
We established a 'Lead Bank' at the start (the largest of the four, with ~45% of the syndicated loan) that took the negotiation mandate. The other three banks delegated to the Lead Bank but retained veto rights on settlement terms.
The settlement was structured so each bank could implement its own risk assessment: two banks remained engaged in the new Tactical financing (on better terms because loan-to-value improved after the workout), two banks were paid out (with a lower ratio but immediate liquidity).
This differentiation was the decisive lever: it enabled the settlement because it respected different bank risk appetites. A uniform ratio would have blocked the settlement.