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Banco Santander (SAN) Buys Stake in U.S Real Estate Portfolio
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With an aim to further bolster its presence in the U.S. multifamily loan space, Banco Santander, S.A. (SAN - Free Report) acquired a 20% stake in a U.S. real estate portfolio from the Federal Deposit Insurance Corporation (“FDIC”), which will hold 80% in a joint venture (JV) with the bank.
SAN paid $1.1 billion for the stake in the JV, which consists of a $9 billion portfolio of New York-based multifamily real estate assets and will service 100% of the assets in the portfolio. These assets were retained by the FDIC subsequent to the collapse of Signature Bank in March.
At that time, Signature Bank was acquired by New York Community Bancorp, Inc.’s (NYCB - Free Report) subsidiary, Flagstar Bank. As part of the deal, NYCB acquired several loan portfolios aggregating $13 billion that exclusively consisted of commercial and industrial loans.
Because of the uncertainty in the digital asset space at that time, NYCB did not acquire any digital asset banking, crypto-related assets or the fund banking business of Signature Bank. Also, it did not buy Signature Bank’s multifamily, commercial real estate and other loans. Hence, the FDIC has been seeking to offload $33 billion worth of real estate loans.
Ana Botín, CEO of Banco Santander, said, “We are a major participant in the U.S. multifamily space and this transaction plays to our strengths.” The company already has a $13.5 billion multifamily real estate loan portfolio and is a leading multifamily bank real estate lender in the United States.
The transaction will be accretive to SAN’s financials effective next year and “consume approximately two basis points of Santander Group CET1, to be paid back within three years.” The loan portfolio in the JV comprises three pools of rent-controlled and rent-stabilized multifamily loans.
Over the past three months, shares of Banco Santander gained 10.7%, outperforming the industry’s rally of 8.7%.
Further, last week, a JV between Blackstone Inc. (BX - Free Report) and the Canada Pension Plan Investment Board (“CPPIB”) won a stake in the $17-billion portfolio of commercial property loans from Signature Bank.
The commercial property loan portfolio that Blackstone and its partners have won includes more than 2,600 first-mortgage loans backed by retail, market-rate apartments and office properties largely located in the New York metropolitan area.
Further, the companies are partnering with funds affiliated with Rialto Capital to acquire a 20% stake in the venture for $1.2 billion. The FDIC continues to maintain an 80% stake in the venture and provide financing equal to 50% of the value.
Blackstone will be the lead asset manager of the portfolio, while Rialto will be the loan servicer and operating partner.
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Banco Santander (SAN) Buys Stake in U.S Real Estate Portfolio
With an aim to further bolster its presence in the U.S. multifamily loan space, Banco Santander, S.A. (SAN - Free Report) acquired a 20% stake in a U.S. real estate portfolio from the Federal Deposit Insurance Corporation (“FDIC”), which will hold 80% in a joint venture (JV) with the bank.
SAN paid $1.1 billion for the stake in the JV, which consists of a $9 billion portfolio of New York-based multifamily real estate assets and will service 100% of the assets in the portfolio. These assets were retained by the FDIC subsequent to the collapse of Signature Bank in March.
At that time, Signature Bank was acquired by New York Community Bancorp, Inc.’s (NYCB - Free Report) subsidiary, Flagstar Bank. As part of the deal, NYCB acquired several loan portfolios aggregating $13 billion that exclusively consisted of commercial and industrial loans.
Because of the uncertainty in the digital asset space at that time, NYCB did not acquire any digital asset banking, crypto-related assets or the fund banking business of Signature Bank. Also, it did not buy Signature Bank’s multifamily, commercial real estate and other loans. Hence, the FDIC has been seeking to offload $33 billion worth of real estate loans.
Ana Botín, CEO of Banco Santander, said, “We are a major participant in the U.S. multifamily space and this transaction plays to our strengths.” The company already has a $13.5 billion multifamily real estate loan portfolio and is a leading multifamily bank real estate lender in the United States.
The transaction will be accretive to SAN’s financials effective next year and “consume approximately two basis points of Santander Group CET1, to be paid back within three years.” The loan portfolio in the JV comprises three pools of rent-controlled and rent-stabilized multifamily loans.
Over the past three months, shares of Banco Santander gained 10.7%, outperforming the industry’s rally of 8.7%.
Image Source: Zacks Investment Research
At present, SAN carries a Zacks Rank #3 (Hold). You can see see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Further, last week, a JV between Blackstone Inc. (BX - Free Report) and the Canada Pension Plan Investment Board (“CPPIB”) won a stake in the $17-billion portfolio of commercial property loans from Signature Bank.
The commercial property loan portfolio that Blackstone and its partners have won includes more than 2,600 first-mortgage loans backed by retail, market-rate apartments and office properties largely located in the New York metropolitan area.
Further, the companies are partnering with funds affiliated with Rialto Capital to acquire a 20% stake in the venture for $1.2 billion. The FDIC continues to maintain an 80% stake in the venture and provide financing equal to 50% of the value.
Blackstone will be the lead asset manager of the portfolio, while Rialto will be the loan servicer and operating partner.