Breaking News
Get 40% Off 0
🔎 See NVDA's full ProTips for an instant risks or rewards Claim 40% OFF

Buyers sought for Signature Bank's $33 billion CRE portfolio

Published Sep 05, 2023 02:54PM ET Updated Sep 05, 2023 06:05PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. A person walks into a Signature Bank branch in New York City, U.S., March 13, 2023. REUTERS/David 'Dee' Delgado
 
SBNY
+17.21%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NYCB
-4.05%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Pete Schroeder

WASHINGTON (Reuters) -The U.S. Federal Deposit Insurance Corporation (FDIC) is seeking buyers for the $33 billion commercial real estate (CRE) loan portfolio of failed New York lender Signature Bank (OTC:SBNY), it said on Tuesday.

The majority of the portfolio comprises multi-family properties primarily located in New York City, the regulator said, adding that it would be marketing the asset over the next three months.

The FDIC has been seeking to sell off portions of Signature, one of three larger banks that failed in the spring, since the bank was closed in March after an exodus of depositors seeking higher returns and safer institutions.

Later that month New York Community Bancorp (NYSE:NYCB) agreed to a deal with the FDIC to buy most deposits and certain loan portfolios along with all 40 of Signature's former branches.

Within the CRE portfolio is about $15 billion of loans secured by residences that are rent stabilized or controlled.

While the commercial real estate industry has been under pressure amid rising rents and lingering office vacancies, Signature Bank's portfolio is relatively attractive, said Matt Pestronk, president and co-founder of Post Brothers, a real estate developer based in Philadelphia.

"The FDIC sale is somewhat unique as it has a large concentration of rent stabilized properties as collateral for the loans,” he said. “Even in this environment there are buyers of rent-stabilized buildings and lenders who make loans on them, because if the underlying properties are valued at cap rates near today's interest rates, they would be very safe investments to own as a loan or as real estate in the case the loans are not performing."

Since the FDIC has a legal obligation to preserve existing affordable housing for lower-income people, the agency said it planned to place all those loans within joint ventures in which FDIC would retain a majority equity interest.

Any winning bidders for those ventures would be responsible for managing and servicing the loans but would have to meet certain requirements to preserve the loans and underlying collateral, the FDIC said.

New York City and State housing authorities, as well as community groups, are providing input to the FDIC as it begins marketing. The FDIC said it expects to complete any portfolio sales by the end of 2023.

Buyers sought for Signature Bank's $33 billion CRE portfolio
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email