A Blackstone-led consortium, comprising Canadian pension fund CPP Investments and real estate developer Rialto Capital, has won the bidding for the largest tranche of the Federal Deposit Insurance Corporation’s auction of Signature Bank.
The FDIC absorbed the bank in March after it collapsed.
The consortium, Hancock JV Bidco, has bought a 20% stake in a joint venture holding $16.8bn of commercial real estate loans. It paid $1.2bn for the stake. FDIC will hold the remaining 80% of the jv.
The commercial real estate loan portfolio comprises more than 2,600 first-mortgage loans on retail, market rate multifamily and office properties primarily located in the New York metropolitan area. The loans are predominantly performing and encompass a wide range of credit profiles, said Blackstone. Around 90% of the loans are fixed-rate with low in-place coupons and strong in-place debt service coverage.
Geoffrey Souter, managing director and head of real assets credit at CPP Investments, said: “The current real estate credit market is a promising source of long-term returns for the CPP fund and we look forward to exploring further opportunities to invest in this and other capital-constrained sectors.”
Blackstone will be the lead asset manager of the portfolio and Rialto Capital will act as the loan servicer and operating partner.
This tranche of Signature loans was put up for sale in September. Newmark was appointed to sell the total loan book in April.
JLL advised Blackstone, CPP and Rialto on the deal.
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