The Federal Deposit Insurance Corporation (FDIC) found a buyer for a $1.85bn portfolio of more than 1,600 commercial real estate loans acquired by the FDIC as receiver of 22 failed financial institutions, according to the buyers. Colony Capital and the Cogsville Group report buying the properties in the second largest bulk sale of commercial-property debt under a public private partnership to date. The portfolio consists of approximately 1,660 distressed commercial real estate loans, of which approximately 50% are delinquent. “The Cogsville Group has participated in the FDIC structured asset sales program from its inception and underwrote and bid on one-third of the assets sold to date,” said CEO Donald Cogsville in a statement. “We believe this transaction will generate attractive returns for our investors and the FDIC, and similar portfolios will be a central focus of our broader investment activities.” As an equity participant, the FDIC will retain a 60% stake and share in the returns on the assets. The FDIC offered 1:1 leverage financing and agreed to guarantee Purchase Money Notes issued in the original principal amount of $545m. The FDIC reports receiving a total of six bids from four bidders for the assets. 73% of the collateral in the portfolio is located in Nevada, California, Colorado, Arizona and Georgia. Colony will manage, service and ultimately dispose of the assets. All of the loans were from banks that failed during the past 23 months. Write to Jacob Gaffney.
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