(Bloomberg) — Blackstone Inc. is the leading candidate to emerge from the Federal Deposit Insurance Corp.’s sale of Signature Bank debt, according to people familiar with the matter. can gain a portfolio of commercial real estate loans worth approximately $17 billion.
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Regulators seized the failed bank in March, marketing loans secured by retail, industrial, office and residential properties. Some respondents said FDIC officials are currently in final discussions to explain that Blackstone’s offer represents the lowest cost to the agency.
Such transactions can be complex. While banking regulators are still working out the final details of the agreement, the exact terms are still in flux. As with all transactions that are not yet finalized, it is possible that another bidder will triumph or that the loan pool will be divided among the applicants.
Blackstone is in talks to partner with Rialto Capital that would help service the loans, some 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 respond seeking comment.
The FDIC has been trying to offload about $33 billion in real estate loans from Signature after the bank collapsed earlier this year. Signature was a large lender to apartment landlords in New York City, with a portion of its loans securing buildings with rent-stabilized or rent-controlled units. These rent-stabilized apartments are not part of the Blackstone deal.
Commercial property owners are under pressure from rising borrowing costs, which are depressing property values and making transactions more difficult. With the market largely frozen, investors have been closely watching the Signature sale to get a better perspective on pricing.
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The bidding process included financial firms such as Starwood Capital Group and Brookfield Asset Management Ltd. attracted. While it’s unclear exactly how many bidders were looking for each portfolio, many companies had planned to work with other firms to solicit bids.
A team from Newmark Group Inc. led by Doug Harmon and Adam Spies is working with the FDIC on the sale. A representative for the brokerage firm declined to comment.
– With assistance from Patrick Clark and Katanga Johnson.
(Updates with potential partners in fourth paragraph.)
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Originally posted 2023-11-19 20:56:20.