Santander Bank has acquired a 20 percent stake in a $9 billion rent-controlled and rent-stabilized multifamily loan portfolio retained by Federal Deposit Insurance Corp. after the failure of Signature Bank. Santander paid $1.1 billion and will service all the assets, which are located in New York City. This marks the final transaction involving the $33 billion loan collection that entered receivership earlier this year.
The FDIC has maintained an 80 percent equity interest in the Signature Bank tranche that will be serviced by Santander. The transaction involved creating a newly formed entity owned by the receiver. The bank will handle the management, servicing and liquidation of the assets.
Wachtell, Lipton, Rosen & Katz, Davis Polk and Chain Bridge Partners advised Santander in the transaction.
The aftermath of Signature Bank’s fall
The marketing process for the portfolio began in September 2023, as the FDIC marketed the transaction on a competitive basis, with a seven-week due diligence period for the qualified parties.
A few days ago, a partnership led by The Community Preservation Corp., alongside Neighborhood Restore HDFC and Related Fund Management, paid $171 million for a 5 percent stake in a $5.8 billion rent-stabilized and rent-controlled multifamily portfolio. A few days prior, a Blackstone-led joint venture also acquired a 20 percent stake in a $16.8 billion senior mortgage loan portfolio that includes office, retail and multifamily properties.
After the collapse of Signature Bank in March 2023, FDIC hired Newmark to sell $60 billion in loans.
Major lender for U.S. multifamily real estate
Santander is a leading multifamily real estate lender in the U.S., with a portfolio valued at $13.5 billion. In 2019, Canyon Partners Real Estate partnered with the bank for the launch of Canyon Multifamily Impact Fund IV, which was set to acquire and manage $100 million of workforce housing communities serving low- to moderate-income residents in the Northeast.
Santander has originated financing for dozens of assets this year alone. In recent months, the bank provided an $86 million construction loan for the development of a 456-unit community in Phoenix, a project carried out by Toll Brothers Apartment Living in partnership with Wilton Investment Management.
The joint venture of The NRP Group and H.I.G. Realty Partners also received a $53.7 million construction loan for the development of a 331-unit community in a suburb of Dallas. The project was valued at $69 million, or $208,000 per unit.
