JPMorgan Chase [JPM]] today purchased a $3.5bn portfolio of 3,800 performing multifamily and other commercial real estate (CRE) loans from a Citigroup (C) subsidiary. While JPMorgan declined to specify the terms of the deal in a news release, it did say the loans are primarily multifamily CRE mortgages backed by properties in California, New York and Illinois. All of the loans in the portfolio are performing and the properties show strong credit performance, JPMorgan said. The move is part of JPMorgan's strategy to expand its commercial term lending business within the Chase Commercial Banking subsidiary. JPMorgan said 80% of the commercial term lending department's $36bn portfolio is multifamily loans. "This highly desirable loan portfolio adds strong earning assets in markets we currently serve and valuable relationships that will provide new origination opportunities," Al Brooks, JPMorgan head of commercial term lending, said in a press statement. "The portfolio mirrors Chase Commercial Term Lending's focus on excellent borrowers in stable markets." The transaction closed immediately and will be reflected in the JPMorgan Q310 financial statement. JPMorgan said in its release that the transaction is not expected to have a material impact on Citi's net income. For Citi Holdings, the Citigroup subsidiary created in January 2009 to hold its nonessential businesses and assets, the deal will reduce the generally accepted accounting principals (GAAP) assets by $3.5bn. It’s the latest in a series of wind-downs of Citi assets as the company looks to recover from the credit crisis. According to the JPMorgan release, Citi Holdings assets were less than 25% of Citi's total balance sheet. "We are excited about the opportunity to provide additional credit for multifamily properties in our core markets and broaden our relationship with these new clients," said Todd Maclin, CEO of Chase Commercial Banking. "We know how important rental apartments are to the health of a community." Write to Austin Kilgore.