Blackstone Poised as Top Contender in Signature Bank’s Property Loan Auction

Blackstone Inc. has emerged as the probable victor in acquiring a substantial $17 billion collection of commercial property loans, part of the Federal Deposit Insurance Corp.’s (FDIC) efforts to sell off assets held by the now-defunct Signature Bank. Sources with knowledge of the proceedings have indicated that discussions are nearing completion, with Blackstone’s proposal potentially being recognized as offering the least expense to the FDIC. 

The ongoing negotiations reflect the intricacies inherent in such transactions; final terms are still under deliberation and subject to change. Until an official announcement is made, there remains a possibility for an upset in favor of another contender or that portions of the loan pool could be distributed amongst various interested parties. 


Key Points:


– The FDIC aims to divest debts accumulated by the defunct lender. 

– Observers are closely monitoring the sale, given the current strains on commercial real estate. 

– Blackstone Inc. is leading the race for a $17 billion loan portfolio from Signature Bank. 


In its bid to dispense with some $33 billion worth of real estate loans amassed by Signature Bank prior to its failure earlier this year, the FDIC has encountered significant interest from various quarters. Signature had notably provided extensive funding for apartment landlords within New York City, especially those managing rent-stabilized or rent-controlled properties; however, these particular assets are not included in Blackstone’s proposed acquisition. 

The surge in borrowing costs has exerted considerable pressure on commercial real estate proprietors by diminishing property values and constricting market activity. Consequently, industry stakeholders are keenly observing how this transaction unfolds as it could serve as a bellwether for asset valuations amidst a sluggish market climate.  

Learn more about the challenges facing commercial real estate in this article from the CRE Insights team: US Banks Witness Highest Surge in Overdue Commercial Property Loans in a Decade. 

Several financial entities including Starwood Capital Group and Brookfield Asset Management Ltd. expressed interest during the bidding phase, which saw numerous companies contemplating joint bids alongside other firms. The sale process is being facilitated by a team from Newmark Group Inc., led by Doug Harmon and Adam Spies.  

Amidst the unfolding auction of Signature Bank’s assets, a significant portion of the portfolio attracting attention includes loans tied to New York City’s rent-regulated apartment buildings. A partnership comprising two nonprofits and Related Fund Management has emerged as the leading contender for these loans, bidding at less than 70 cents on the dollar—underscoring a notable depreciation in this segment of the real estate market. 

The Wall Street Journal reported that this venture could be declared as the winner for the bid involving billions worth of Signature Bank’s loans centered around New York apartments. This development is part of a larger effort by the FDIC to find buyers for Signature Bank’s extensive $33 billion commercial real estate loan portfolio following its failure. The FDIC has been working with Newmark Group since March to divest nearly $60 billion in loans after state regulators shuttered Signature Bank amidst regional bank disturbances earlier in the year.  

Read more in the WSJ, here. 

November 20, 2023