Today, the Federal Deposit Insurance Corporation (FDIC) announced the start of a marketing process for the approximately $33 billion Commercial Real Estate (CRE) loan portfolio retained in receivership following the failure of Signature Bank, New York, New York.
The majority of the CRE loan portfolio being marketed is comprised of multifamily properties, primarily located in New York City. A large portion (approximately $15 billion) of the CRE loans secured by multifamily residences are rent stabilized or rent controlled. The FDIC has a statutory obligation, among other factors, to maximize the preservation of the availability and affordability of residential real property for low- and moderate-income individuals. To support this obligation, the FDIC will place the rent stabilized or rent controlled loans in one or more joint ventures (JV) with the FDIC retaining a majority equity interest in the JV. In addition, the JV operating agreement will provide certain requirements that facilitate the financial and physical preservation of these loans and underlying collateral.
While the FDIC will retain a majority equity interest in the JVs, the winning bidders, or partners, will act as the managing member of the joint venture and will be responsible for the management, servicing and ultimate disposition of the loans. The JV partner will be required to manage the portfolio in accordance with the JV operating agreement and be subject to stringent monitoring.
For this subset of the portfolio, the FDIC engaged with New York City and New York State housing authorities and government agencies, as well as community-based organizations, to obtain their input and provide information on the FDIC’s efforts as the FDIC developed its marketing and disposition strategy.
Marketing of the former Signature Bank’s CRE portfolio will take place over the next three months and the transactions are expected to be completed by year-end 2023. The FDIC has retained Newmark & Company Real Estate, Inc. (Newmark) as an advisor on this sale. Interested parties should contact NewmarkSBBPortfolio@nmrk.com to obtain further information about the sale and the qualifications to participate. During the marketing process, the FDIC and Newmark will conduct outreach to potential bidders on the qualification process. For general information about the FDIC’s asset sales program, visit the FDIC’s website.
This announcement is for information purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, any loans or securities or any interest therein.