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Blackstone-led JV Wins $17B Stake In Signature’s CRE Portfolio

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Blackstone-led JV Wins $17B Stake In Signature's CRE Portfolio

(CTN News) – On Thursday, a joint venture led by Blackstone (BX) and the Federal Deposit Insurance Corporation (FDIC) announced their acquisition of a 20 percent stake in $16.8 billion worth of commercial real estate loans from the failed Signature Bank (SBNY).

Blackstone Real Estate Debt Strategies and Real Estate Income Trust formed the joint venture with a subsidiary of the Canada Pension Plan Investment Board and funds affiliated with Rialto Capital.

The FDIC provided financing equivalent to 50 percent of the venture’s value and currently holds an 80 percent ownership stake, as stated by the agency. JLL acted as the real estate advisor to Blackstone, CPP Investments, and Rialto Capital.

Approximately three weeks after Bloomberg reported Blackstone as the frontrunner for the loans, the FDIC awarded the Blackstone joint venture a 20 percent equity stake in the nearly $17 billion Signature CRE portfolio.

According to a report by Commercial Observer, Related Fund Management is expected to secure a 5 percent stake in $6 billion worth of Signature loans that are backed by rent-regulated multifamily properties in the New York City metropolitan region.

Despite offering less than 69 cents on the dollar compared to bids above 80 cents, Related Fund Management is likely to win the rights to these loans. However, the FDIC has not yet officially announced Related as the winner.

On the other hand, the Blackstone joint venture has successfully acquired a CRE portfolio consisting of over 2,600 first mortgage loans.

These loans are primarily on retail, market-rate multifamily, and office properties located in the New York metropolitan area.

The FDIC stated that approximately 90 percent of these loans have fixed rates, low in-place coupons, and strong in-place debt service coverage.

Jonathan Pollack, the global head of Blackstone real estate credit, expressed his confidence in the acquisition, stating that Blackstone’s real estate insights and credit expertise allowed them to underwrite around $17 billion of senior mortgage loans.

He further mentioned that they are excited to work with their borrowers and partners to maximize the potential of these assets.

In terms of management, Blackstone is the lead asset manager of the portfolio, while Rialto Capital serves as the loan servicer and operating partner.

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