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A joint venture of Related Fund Management and two non-profits are expected to win an auction of billions of dollars of Signature Bank (OTCPK:SBNY) loans backed by New York apartments, according to a WSJ report that cites people familiar with the matter.
The JV’s bid was less than 70 cents of the loan’s face value, showing the extent to which New York’s rent-regulated apartment market has lost value of late. The auction’s winner could be announced as soon as Monday.
Related Fund Management, affiliated with New York developer Related Cos., provided most of the money for the bid for the rent-regulated assets. The nonprofits – Community Preservation Corp. and Neighborhood Restore – will help oversee the loans and may manage the properties if the owners default.
Meanwhile, a partnership between Blackstone (BX) and asset management firm Rialto Capital is among the top bidders for one pool of Signature’s (OTCPK:SBNY) assets backed by commercial property.
SBNY has around half of its assets in the rent-regulated category, while the other half consists of assets backed by other commercial properties.
Federal Deposit Insurance Corp., which seized Signature (OTCPK:SBNY) earlier this year, is conducting the sale of the failed bank’s assets. The FDIC plans to retain a 95% stake in the rent-regulated assets.
In September, a $33B commercial real estate loan portfolio of Signature (OTCPK:SBNY) was put up for sale by the FDIC.