Blackstone-led JV Awarded 20% Stake in Signature’s $17B CRE Portfolio
By Andrew Coen December 14, 2023 5:42 pm
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A Blackstone (BX)-led joint venture has teamed up with the Federal Deposit Insurance Corporation (FDIC) to acquire a 20 percent stake in $16.8 billion of commercial real estate loans from failed Signature Bank (SBNY), the private equity firm announced Thursday.
Blackstone Real Estate Debt Strategies along with Blackstone Real Estate Income Trust formed the JV with a subsidiary of Canada Pension Plan Investment Board and funds affiliated with Rialto Capital. The FDIC provided financing equal to 50 percent of the venture’s value and is maintaining an 80 percent ownership stake, according to the agency. The winning bid was $1.2 billion, the FDIC said.
Newmark (NMRK)’s Doug Harmon and Adam Spies represented the FDIC in arranging the deal.
JLL served as real estate advisor to Blackstone, CPP Investments and Rialto Capital.
The FDIC awarded the nearly $17 billion Signature CRE portfolio 20 percent equity stake to the Blackstone JV roughly three weeks after the firm was reported as the frontrunner for the loans by Bloomberg.
Related Fund Management is expected to win the rights to a 5 percent stake in $6 billion of Signature loans securing rent-regulated multifamily properties in the New York City metropolitan region despite its bid being less than 69 cents on the dollar compared to bids above 80 cents, Commercial Observer first reported last month. The FDIC has not formally announced Related as the winner.
The CRE portfolio won by the Blackstone JV consists of more than 2,600 first-mortgage loans on retail, market-rate multifamily and office properties located primarily in the New York metropolitan area. Roughly 90 percent of the loans are fixed rate with low in-place coupons and strong in-place debt service coverage, the FDIC said in its announcement,
“Blackstone’s extraordinary real estate insights and credit expertise positioned us to underwrite approximately $17 billion of senior-mortgage loans, allowing us to acquire the entire commercial real estate loan portfolio at an attractive basis,” Jonathan Pollack, global head of Blackstone real estate credit, said in a statement. “We look forward to working with our borrowers and our partners to maximize the potential of these assets.”
Blackstone is lead asset manager of the portfolio with Rialto Capital acting as the loan servicer and operating partner.
Andrew Coen can be reached at acoen@commercialobserver.com
