By Niket Nishant
(Reuters) -Various asset supervisor Blackstone has purchased almost $2 billion value of economic actual property loans from regional lender Atlantic Union Bankshares, additional extending its aggressive push into the CRE sector.
The loans had been purchased at a slight low cost to their face worth, the businesses stated on Thursday. The loans originated from Sandy Spring Financial institution, which Atlantic Union purchased in a $1.6 billion deal in April.
The sale permits Atlantic Union to swiftly scale back its publicity to CRE loans, a section that has been underneath stress attributable to elevated rates of interest and rising workplace vacancies pushed by the rise of distant work.
Proceeds from the sale will allow Atlantic Union to pay down expensive deposits and increase its portfolio of securities investments, the corporate stated.
“We view the sale as a optimistic, as completion of the transaction at an affordable worth had been a query for some,” Raymond James analysts wrote in a word, reiterating their “robust purchase” ranking on the inventory.
In the meantime, for Blackstone, the deal was one other alternative to amass CRE property at a reduction. The corporate has been ramping up its publicity to the sector over latest years, notably by the acquisition of a stake within the $17 billion CRE debt portfolio of Signature Financial institution, a lender that failed in 2023.
Blackstone has pushed into the sector to capitalize on banks’ retreat, deploy capital and safe higher-yielding funding alternatives.
The corporate is executing the deal by its Blackstone Actual Property Debt Methods arm, which at present manages $76 billion of property, together with $8 billion it raised in March for one of many largest actual property debt funds ever.
Morgan Stanley served as the only real structuring adviser to Atlantic Union, whereas Citigroup World Markets and CBRE Nationwide Mortgage & Portfolio Sale Advisors acted as monetary advisers to Blackstone.
(Reporting by Niket Nishant in Bengaluru; Modifying by Mohammed Safi Shamsi and Shinjini Ganguli)