Signature Bridge Bank, under receivership of the Federal Deposit Insurance Corp., sold a 20% stake in a $16.8 billion commercial real estate loan portfolio that it announced plans to offload in September.

Hancock JV Bidco, a joint venture of asset manager Blackstone and other investors, paid $1.2 billion for a portion of the portfolio now dubbed SIG CRE 2023 Venture LLC. The FDIC, which provided 50% financing equal to half the venture’s value, will retain an 80% stake in the venture.

The portfolio, which was part of a larger $33 billion CRE loan portfolio, contains more than 2,600 first mortgage loans on retail, market rate multifamily and office properties located mostly in the New York City metropolitan area.

Blackstone subsidiaries Blackstone Real Estate Debt Strategies and Blackstone Real Estate Income Trust make the investment alongside Canada Pension Plan Investment Board subsidiary CPPIB Credit Investments III and Rialto Capital, confirming November reports from Bloomberg and The Wall Street Journal that Blackstone and Rialto would come out of the auction with the winning bid.

“We are excited to invest in this compelling, large-scale opportunity on behalf of our BRED and BREIT investors. Blackstone’s extraordinary real estate insights and credit expertise positioned us to underwrite approximately $17 billion of senior mortgage loans, allowing us to acquire the entire commercial real estate loan portfolio at an attractive basis,” said Jonathan Pollack, global head of Blackstone Real Estate Credit, in a prepared statement. “We look forward to working with our borrowers and our partners to maximize the potential of these assets.”

Loans within the portfolio encompass a broad range of credit profiles, and “approximately 90% of them are fixed rate with low in-place coupons and strong in-place debt service coverage,” Blackstone said in its announcement.

“The current real estate credit market is a promising source of long-term returns for the CPP Fund and we look forward to exploring further opportunities to invest in this and other capital-constrained sectors,” said Geoffrey Souter, head of real assets credit at CPP Investments, in the firms’ announcement. “This opportunity builds on our longstanding partnership with Blackstone and is a testament to CPP Investments’ expertise in real estate credit, demonstrating our ability to transact quickly and at scale.”

Hancock will now be responsible for managing, servicing and liquidating the venture’s assets. The FDIC will monitor and oversee Hancock’s management of the portfolio, the agency said.

Not included in the sale are billions of dollars in loans collateralized by rent-stabilized or rent-controlled multifamily properties. The FDIC said it expects to announce transactions for that portion of the portfolio soon.

Sales in the rent-regulated apartment market in New York City have fallen in recent years as a result of laws making it harder to raise rents in the segment. Landlord trade group the Community Housing Improvement Program told The Wall Street Journal that building values of rent-regulated apartments have fallen as much as 70%.