Atlantic Union Bank has closed the sale of about $2 billion in performing commercial real estate loans to Blackstone Real Estate Debt Strategies, the company announced Thursday.
The CRE loan sale, primarily covering locations in the Washington, D.C., metro area, was announced as part of Virginia-based Atlantic Union’s merger with Sandy Spring Bancorp, which closed in April. The lender retained customer-facing servicing responsibilities and sold the loan portfolio at a percentage of par value in the low-90s.
“After closing our acquisition of Sandy Spring, we have been focused on integration and execution,” Atlantic Union CEO John Asbury said in a statement. “The loan sale transaction reduces our CRE concentration and frees up capacity for potential future growth.”
Blackstone, an alternative asset manager with nearly $76 billion of investor capital under management, has snapped up $20 billion of CRE loan portfolios over the past two years. The acquisition includes a roughly 20% stake in the $17 billion Signature Bank CRE debt portfolio.
“This transaction demonstrates the breadth of our market-leading platform and deep expertise providing solutions to financial institutions for their commercial real estate portfolios,” Tim Johnson, global head of Blackstone Real Estate Debt Strategies, said in a statement Thursday.
Several banks have sought, in recent years, to limit their exposure to commercial real estate. Souring CRE loans played a prominent role in a surprise $252 million loss at New York Community Bank that nearly spurred its collapse in January 2024.
The bank, months later, announced it would sell roughly $5 billion in mortgage warehouse loans to JPMorgan Chase in an effort to boost liquidity levels.
A strong concentration of CRE loans also contributed to the termination of an expected merger between HomeStreet and FirstSun.
HomeStreet sold $990 million in multifamily CRE loans to Bank of America in December, then inked a $300 million deal to be purchased by California-based Mechanics Bank.
Bank of America has been a frequent acquirer of cast-off CRE loans. The bank bought roughly 2,000 commercial multifamily real estate loans from Seattle-based WaFd in May 2024 for about $2.9 billion.
Analysts at Raymond James and Piper Sandler saw the Atlantic Union-Blackstone deal as “positive.”
“The transaction frees up liquidity to support loan growth, purchase securities and reduce wholesale funding and should be supportive of the bank’s [net interest margin] outlook,” Raymond James analysts wrote. They expect “a significant improvement in financial performance over the next 12 months as the loan pipeline continues to build, core NIM appears likely to expand, and asset quality remains strong.”
