June 22, 2024


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Blackstone is the lead bidder in the landmark bank mortgage sale

Blackstone is the lead bidder in the landmark bank mortgage sale

(Bloomberg) — Blackstone is the favorite to win a portfolio of about $17 billion in commercial real estate loans from the Federal Deposit Insurance Corp.’s sale of Signature Bank’s debt, according to people familiar with the matter.

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Regulators took over the bankrupt bank in March and marketed loans backed by retail, industrial, office and apartment buildings. FDIC officials are now in final discussions to announce that Blackstone’s bid would yield the lowest costs for the agency, some of the people said.

Such deals can be complicated. While bank regulators are still working out the final nuances of the arrangement, the exact terms are in flux. As with all transactions that are not finalized, it is possible that another bidder will win or the loan pool will be divided between suitors.

Blackstone is in talks to partner with Rialto Capital, which would help service the loans, some of the people said.

A Blackstone spokesman did not immediately respond to a request for comment. An FDIC representative declined to comment. A representative for Rialto did not immediately return a message seeking comment.

The Federal Deposit Insurance Corporation (FDIC) sought to unload nearly $33 billion in Signature’s mortgage loans after the bank collapsed earlier this year. Signature has been a large lender to apartment owners in New York City, with a portion of the loans backing buildings that have rent-stabilized or rent-controlled units. These rent-stabilized apartments are not part of the Blackstone deal.

Commercial property owners have been under pressure from rising borrowing costs, which has depressed property values ​​and stifled transactions. With the market largely frozen, investors have been watching the Signature sell-off closely in an attempt to get a better indication of the price.

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The bidding process attracted finance companies including Starwood Capital Group and Brookfield Asset Management Ltd. While it is unclear exactly how many bidders sought each portfolio, several companies planned to collaborate with other companies to obtain bids.

A team from Newmark Group Inc. Doug Harmon and Adam Spies with the FDIC led the sale. A representative for the mediation declined to comment.

-With assistance from Patrick Clarke and Katanga Johnson.

(Updates with potential partner in fourth paragraph.)

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