The Federal Deposit Insurance Corp. is seeking buyers for a roughly $33 billion portfolio of commercial real-estate loans it retained in the March failure of Signature Bank, the regulator said Tuesday.
Most of the portfolio is made up of multifamily homes, primarily in New York City, the FDIC said. About $15 billion of the loans are tied to properties that are rent-stabilized or rent-controlled.
Because the FDIC has an obligation to preserve affordable housing, the agency will place the rent-controlled and rent-stabilized loans in a joint venture and retain a majority equity interest.
The bid deadline on the loans is set for Nov. 1, Bloomberg reported. Transactions are expected to be completed by the end of the year, the FDIC said.
The debt is being split into 14 pools, and the FDIC is offering financing on some of it, a notice indicated.
The FDIC has been gradually offloading Signature’s loans. The agency in July launched the sale of an $18.5 billion portfolio of loans made to private-equity and investing firms. The bid deadline for that sale is Sept. 12.
Tuesday’s announcement means the FDIC has yet to seek bids on roughly $8.5 billion in Signature loans. New York Community Bank acquired a large segment of Signature in March but left the CRE loans behind, noting that it was diversifying away from the segment.
Lenders in commercial real estate have seen several challenges in the market in recent years. Rising interest rates have increased borrowing costs and stagnated buyers’ enthusiasm, while the COVID-19 pandemic has drastically reduced office occupancy rates.
Buyers of the latest Signature loans may have to navigate input, too, from New York City and state housing authorities and community-based organizations, which the FDIC said it engaged before putting the portfolio up for sale.
