Finance  ·  Distress

Blackstone Already Planning to Sell $1.8B Worth of Signature Bank CRE Loans: Report

A Blackstone-led joint venture won a 20% stake in a $17B loan pool in December 2023

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Blackstone (BX) is already looking to offload some of its Signature investment. 

The asset management behemoth plans to sell roughly $1.8 billion worth of commercial real estate loans it won last month during an auction of remaining assets tied to Signature Bank, which failed in March 2023. Bloomberg first reported the news.

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A majority of assets in the $1.8 billion loans are backed by apartment buildings, according to Bloomberg.  

Last month, Blackstone Real Estate Debt Strategies along with Blackstone Real Estate Income Trust formed a joint venture with a subsidiary of Canada Pension Plan Investment Board (CPPIB) and funds affiliated with Rialto Capital to bid on part of Signature’s portfolio. 

The consortium purchased a 20 percent stake in $16.8 billion worth of Signature Banks’ CRE loans backed by retail, market-rate multifamily, and office properties in the New York City metropolitan area, with the Federal Deposit Insurance Corporation (FDIC) holding the remaining 80 percent stake. 

The FDIC had previously announced that nearly 90 percent of the loans in the 2,600-property portfolio are fixed-rate loans with low in-place coupons and strong in-place debt service coverage, which pay solid returns and are backed by stable properties. 

Blackstone has served as the lead asset manager on the loan purchase, with Rialto Capital working as the loan servicer and operating partner. 

But now that a sale is underway, it’s unclear how much of the portfolio Blackstone and its partners will continue to oversee and hold onto. Brokerage JLL (JLL) has been tapped to oversee Blackstone’s sale of this portion of loans.  

Blackstone declined to comment. JLL did not respond to requests for comment

With additional reporting by Andrew Coen.

Brian Pascus can be reached at bpascus@commercialobserver.com.