“The FDIC has a legal obligation to maximize the availability and affordability of residential real estate, especially for low- and moderate-income individuals,” the statement said. “To support this mandate, the FDIC will place rent stabilization or rent control loans into one or more joint ventures, with the FDIC owning a majority stake in the joint ventures.”
The winning bidder will repay the debt. The FDIC said the joint venture agreement will have certain requirements that “facilitate the financial and physical security of these loans and underlying collateral.”
Debt is divided into 14 pools. The FDIC is proposing to finance part of the debt, according to the notice. The bidding deadline is set for November 1st.
Investors have been keeping an eye on the sale process, which could be an indicator of the value of a dried up market with few transactions so far. The commercial real estate market has slowed significantly over the past year due to rising borrowing costs and falling values.
The transaction is expected to close by the end of 2023. Newmark Group is the intermediary that controls the sale.
The bond’s marketing is the latest step in the FDIC’s offloading of approximately $60 billion of Signature Bank loans. In July, the FDIC said it was seeking buyers for a $18.5 billion portfolio of loans from Signature, which is linked to large private equity and investment firms. The deadline for bidding on the sale is Sept. 12, according to the FDIC.
