Atlantic Union Bankshares in Richmond, Virginia, bought a $2 billion portfolio of business actual property loans, finishing a activity it set for itself in October, when it acquired Sandy Spring Bank.
American Banker/John Reosti
UPDATE: This article features a new remark by Atlantic Union.
In a deal that closes the loop on its transformative acquisition of Sandy Spring Bank, Atlantic Union Bankshares mentioned it bought $2 billion in performing business actual property loans to Blackstone Real Estate Debt Strategies.
The $38 billion-asset Atlantic Union introduced its intent to promote a CRE portfolio in October, when it struck its $1.3 billion deal for Sandy Spring. The subsequent mortgage sale, introduced late Thursday, reduces Atlantic Union’s CRE publicity whereas offering the means to pay down high-cost funding and add to the securities ebook.
John Asbury
American Bankers Association
The episode “is one other proof level of Atlantic Union’s skill to execute and ship on transactions that create long-term worth for our shareholders,” President and CEO John Asbury mentioned in a press launch. “[It] reduces our CRE focus and frees up capability for potential future development.”
The Richmond, Virginia, financial institution will proceed servicing the CRE loans it bought to Blackstone. Retaining servicing rights is essential as a result of it supplies a chance to protect the banking relationships with debtors and, doubtlessly, make new loans when the prevailing credit mature, Hovde analyst David Bishop wrote Friday in a analysis be aware.
Atlantic Union had already marked the CRE portfolio to market, so there was no loss related to the sale, regardless that the loans had been bought at a reduction, in accordance to Bishop. Indeed, the deal may yield a small acquire, he wrote.
“We view this sale as a serious first-step optimistic,” Bishop wrote.
Atlantic Union Spokesman Bill Cimino mentioned the sale phrases Atlantic Union obtained had been higher than it anticipated when it discounted the loans in April. “It exhibits there’s an urge for food for these loans amongst buyers,” Cimino informed American Banker Friday.
Banks promoting off business actual property loans has turn into a recurrent theme as monetary establishments look to restrict draw back vulnerability to a sector marked by issues about retail, multifamily and workplace emptiness charges. In December, the $62 billion-asset Valley National Bancorp in New York bought a $1 billion CRE portfolio to Brookfield Asset Management. The identical month, HomeStreet in Seattle agreed to promote a $990 million CRE portfolio to Bank of America.
HomeStreet, the holding firm for HomeStreet Bank, later agreed to promote itself to the $16 billion-asset Mechanics Bank in Walnut Creek, California.
Blackstone Real Estate Debt Advisors, which originates loans and invests in actual estate-related debt for institutional and personal buyers, has accomplished a number of current transactions involving financial institution CRE portfolios. In May 2024, Blackstone acquired $1 billion of loans originated by a German financial institution backed by multifamily, workplace and hospitality properties within the U.S. and the United Kingdom. Five months earlier, in December 2023, Blackstone acquired a 20% stake in a three way partnership holding $17 billion of CRE loans originated by the failed Signature Bank.
The Atlantic Union mortgage sale “demonstrates the breadth of our market-leading platform and deep experience offering options to monetary establishments for his or her business actual property portfolios,” Tim Johnson, international head of Blackstone Real Estate Debt Strategies, mentioned in a press launch.
Atlantic Union closed its acquisition of the Olney, Maryland-based Sandy Spring forward of schedule in April. The deal established the corporate as the most important regional financial institution in Maryland and Virginia. With Sandy Spring beneath its belt, Asbury mentioned the corporate plans to pivot south and search development alternatives in North and South Carolina.
“We push south and make the funding within the Carolinas over time. That would be the subsequent massive factor,” Asbury mentioned in a current interview with American Banker.
