As part of a newly formed joint venture, Blackstone acquired a stake in $16.8 billion of the failed Signature Bank’s loan portfolio.
The venture is made up of Blackstone Real Estate Debt Strategies and Blackstone Real Estate Income Trust, along with Canada Pension Plan Investment Board and funds affiliated with Rialto Capital. The group paid $1.2 billion for its 20% equity stake, according to a statement on Thursday from Blackstone.
Blackstone will be the lead asset manager of the portfolio and Rialto will act as the loan servicer and operating partner. Blackstone, the largest owner of commercial real estate globally, has originated or acquired more than $170 billion of real estate loans and securities since the founding of its real estate credit business. Rialto oversees over $100 billion of commercial real estate loans.
The Federal Deposit Insurance Corporation, through a venture, maintains an 80% ownership stake and provided financing equal to 50% of the value. FDIC retained the portfolio in receivership of the failed bank.
Signature Bank collapsed on March 12, shortly after the failure of Silicon Valley Bank. The bank was flooded with withdrawal requests from anxious customers in favor of moving to larger institutions. The bank’s failure was deemed a systemic risk, causing a bridge bank to be established until a buyer was found.
The commercial real estate loan portfolio comprises more than 2,600 first mortgage loans on retail, market rate multifamily and office properties primarily located in the New York metropolitan area.
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