FDIC Sells Equity Stake in $1bn Portfolio of Distressed CRE Loans

Colony Capital Acquisitions won the bidding process on a sale of equity interest in 1,200 commercial mortgages the Federal Deposit Insurance Corp. (FDIC) seized from depository institutions that failed within the past 18 months. FDIC created a limited liability company, called a multibank structured transaction, to hold commercial real estate assets from 22 failed bank receiverships. As winner of the bidding process, Los Angeles-based Colony Capital purchases a 40% ownership interest in the company. The commercial real estate loans comprising the company bear a combined unpaid principal balance of $1.02bn and are 70% delinquent by loan count, according to an FDIC statement Friday. Colony Capital paid $90.5m for its 40% equity stake – equal to around 44% of the unpaid principal balance of the assets. Colony Capital will manage, service and provide for ultimate disposition of the assets. The participating FDIC receiverships retain ownership of the remaining 60% equity interest in the limited liability company. The news comes after a record year of bank failures, as 140 FDIC-insured institutions were shut down by regulators in 2009. The FDIC in early October sold an equity interest in a transaction — bearing $4.5bn of assets from failed Corus Bank — to Starwood Capital Group. An FDIC source confirmed to HousingWire the department is also looking to sell rights to a mortgage-servicing portfolio previously held by Amtrust Bank. FDIC could not disclose the portfolio’s worth, but indicated a sale is desired in Q210. Write to Diana Golobay.