Newmark tapped to sell Signature Bank loans

Doug Harmon, Adam Spies likely to handle $60B debt sale

Newmark’s Doug Harmon and Adam Spies (Getty, Newmark)
Newmark’s Doug Harmon and Adam Spies (Getty, Newmark)

After New York Community Bank decided against acquiring Signature Bank’s commercial real estate loans following its collapse earlier this month, the Federal Deposit Insurance Corp. has started the process to get them sold.

The FDIC tapped Newmark to sell the roughly $60 billion of remaining loans from the failed bank, the Wall Street Journal reported. Adam Spies and Doug Harmon will likely spearhead the sales. The power broker duo recently moved over from Cushman & Wakefield.

NYCB, through its subsidiary Flagstar Bank, recently acquired a $12.9 billion piece of Signature’s $74 billion portfolio. But the deal notably omitted Signature’s commercial real estate portfolio, totaling $35 billion as of the end of last year, or its $19.5 billion multifamily loan book.

Jay Martin, executive director of landlord group the Community Housing Improvement Program, said that was “really concerning” and suggested it could be part of broader issues in the multifamily market.

Considering the loans will likely sell at a distressed price, the process is expected to have a negative impact on commercial real estate values, already hampered by rising interest rates and individual property sector struggles; interest rates have risen 4 percentage points in the last year.

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It’s not clear if the loan book will be sold whole or piecemeal.

The majority of Signature’s outstanding loans in the multifamily sector was for rent-stabilized properties, which have decreased in value from 20 to 65 percent since a 2019 state law severely limited rent increases.

Since the start of 2020, Signature issued the highest volume of commercial real estate mortgages in New York City, according to PincusCo. In that period, it lent out $13.4 billion against New York City properties with loan amounts of $5 million or greater. Office loans accounted for about 5 percent of its total loans.

Holden Walter-Warner

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