A partnership led by The Community Preservation Corp., alongside Neighborhood Restore HDFC and Related Fund Management, has entered a joint venture with the Federal Deposit Insurance Corp., to acquire a 5 percent stake in a $5.8 billion rent-stabilized and rent-controlled multifamily loan portfolio retained after the failure of Signature Bank. The partnership paid $171 million and will act collectively as Community Stabilization Partners.
The FDIC will maintain 95 percent ownership. The transaction involved FDIC-Receiver establishing two new ventures and then selling the established equity interest in each venture to CPC, a non-profit multifamily finance company that offers financial resources for the revitalization of underserved communities.
The portfolio includes 868 permanent loans for multifamily properties encompassing nearly 35,000 units located in New York City, of which 80 percent are rent regulated. CPC will handle management, servicing and liquidation of each asset and will also manage the portfolio based on the terms of the transactions.
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This most recent announcement follows the recent deal in which a Blackstone-led joint venture acquired a 20 percent stake in a $16.8 billion senior mortgage loan portfolio that includes office, retail and multifamily assets. All the transactions involve tranches of an overall $33 billion commercial real estate portfolio, which was retained in receivership in March by the New York State Department of Financial Services. At that time, FDIC hired Newmark to sell $60 billion in loans.
Doug Harmon and Adam Spies, both co-heads of U.S. Capital Markets at Newmark, advised FDIC in the current transaction, according to ConnectCRE.
The Community Preservation Corp.’s expertise
The marketing process began in September 2023, on a competitive basis, and had a seven-week due diligence period for the qualified parties.
CPC, which was selected, was established in 1974. In the following decades, the non-profit invested more than $14 billion to finance the development of more than 225,000 affordable housing units and has a $3.8 billion loan servicing portfolio that includes more than 1,700 loans of affordable and rent-controlled properties.
