Santander Bank has won a federal auction to buy a stake in a $9 billion loan portfolio once held by the failed Signature Bank that backed rent-controlled New York City apartment properties.
The Federal Deposit Insurance Corp. said the deal concludes its efforts to dispose of $33 billion in commercial real estate loans held by Signature Bank when it failed last March. Other buyers previously disclosed included investment management giant Blackstone; Axos Financial, a bank holding company in San Diego; and Community Preservation Corp., a nonprofit multifamily finance company in New York.
Under the latest transaction, Boston-based Santander paid $1.1 billion to acquire a 20% equity stake in a new joint venture that will hold the New York apartment loans and will service 100% of the assets in the portfolio. The FDIC retained equity interests in the remaining 80% of the joint venture.
Spanish financial services giant Banco Santander is the holding company for Santander Bank, a leading multifamily bank real estate lender in the U.S. with a $13.5 billion multifamily real estate portfolio.
"Santander US is a top-10 multifamily bank real estate servicer and lender and this transaction will leverage that industry expertise while also deepening our franchise in the New York metro market," Tim Wennes, Santander U.S. country head and Santander Bank president and CEO, said in a statement.
The portfolio of loans in the joint venture consists of three pools of rent-controlled and rent-stabilized multifamily loans.
For this portfolio, the FDIC worked 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 disposition strategy.
For the Record
A Newmark team led by Doug Harmon and Adam Spies acted as the financial advisor for the FDIC.