FDIC Signature Bank Receivership Sells 20 Percent Equity Interest in Entity Holding $9 Billion Rent-Stabilized / Rent-Controlled Multifamily Loans
The Federal Deposit Insurance Corporation (FDIC) announced today that it has sold a 20 percent equity interest in an entity holding $9 billion of rent-stabilized and rent-controlled multifamily loans.
The FDIC, acting as the Receiver of Signature Bridge Bank, N.A., recently completed the final transaction involving the marketing of a $33 billion Commercial Real Estate (CRE) portfolio that was retained in receivership after the failure of Signature Bank, based in New York, New York.
SBNA Investor LLC (SBNA), an entity indirectly controlled by Santander Bank, N.A., has acquired a 20 percent equity interest in SIG RCRS A/B MF 2023 Venture LLC (Venture). This newly-formed entity is wholly owned by the FDIC-Receiver. SBNA paid $1.1 billion for the equity interest, while the FDIC-Receiver will retain an 80 percent equity interest in the Venture.
The FDIC-Receiver contributed approximately $9.0 billion of loans collateralized by rent-stabilized or rent-controlled properties to the Venture. This transaction is in line with the FDIC-Receiver’s statutory obligation to preserve the availability and affordability of residential real property for low- and moderate-income individuals.
To ensure the preservation of the underlying collateral, the terms of the transaction include specific requirements. SBNA will be responsible for managing, servicing, and liquidating the assets of the Venture. They will also be required to manage the portfolio in accordance with the terms of the transaction, subject to comprehensive monitoring and oversight by the FDIC-Receiver.
The marketing process for this portfolio began in September 2023 and was conducted on a competitive basis. Qualified parties were given a seven-week due diligence period to participate in the bidding process. Ultimately, SBNA was selected as the winning bidder after careful consideration of the FDIC-Receiver’s statutory obligations.
Throughout the marketing and disposition strategy development, the FDIC-Receiver engaged with New York City and New York State housing authorities, government agencies, and community-based organizations. Their input was sought to ensure that the FDIC-Receiver’s efforts aligned with the needs and interests of the community.
This transaction marks an important step in the resolution of the Signature Bank receivership. The FDIC-Receiver remains committed to fulfilling its obligations and working collaboratively with stakeholders to achieve the best possible outcomes.
For more information on the FDIC-Receiver’s asset dispositions and other related updates, please visit the official FDIC website.
Frequently Asked Questions
What is the FDIC Signature Bank Receivership?
The FDIC Signature Bank Receivership refers to the process in which the FDIC acts as the Receiver of Signature Bank, N.A. This occurs when the bank fails and is placed in receivership, and the FDIC steps in to manage the bank’s assets.
What is rent-stabilized and rent-controlled multifamily loans?
Rent-stabilized and rent-controlled multifamily loans are loans that are collateralized by properties subject to rent stabilization or rent control regulations. These regulations aim to ensure that rental properties are affordable and available to low- and moderate-income individuals.
Who acquired the equity interest in the entity holding the multifamily loans?
SBNA Investor LLC, an entity indirectly controlled by Santander Bank, N.A., acquired a 20 percent equity interest in the entity holding the multifamily loans. They paid $1.1 billion for this equity interest.
What are the responsibilities of SBNA in managing the multifamily loans?
SBNA will be responsible for the management, servicing, and liquidation of the multifamily loans. They will also need to adhere to the terms of the transaction and be subject to monitoring and oversight by the FDIC-Receiver.
How does this transaction align with the FDIC-Receiver’s obligations?
This transaction aligns with the FDIC-Receiver’s statutory obligation to preserve the availability and affordability of residential real property for low- and moderate-income individuals. The FDIC-Receiver has carefully considered the requirements that facilitate the financial and physical preservation of the underlying collateral.
About Signature Bank
Signature Bank was a New York-based bank that failed and was placed in receivership. The FDIC stepped in as the Receiver and has been handling the bank’s assets and resolutions since then.
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