When banks fail, who’s getting their hands on the distressed properties taken over by the Federal Deposit Insurance Corp (FDIC)?

Here is one of the pieces of the distressed market puzzle ……

Read the full WSJ article.

The Opportunity: A partnership between Colony Capital LLC and a minority-owned investment firm won the bidding for a $1.85 billion portfolio of distressed commercial real-estate loans auctioned off by the FDIC.

The deal, the second-largest bulk sale of commercial-property debt under a public-private partnership.

Terms of the transaction: Los Angeles-based Colony and New York-based Cogsville Group LLC agreed to pay 59 cents on the dollar, or $445 million, for a 40% equity stake in the assets consisting of 1,660 commercial-property loans held by 22 now-defunct banks, including Community Bank of Nevada, First Bank of Beverly Hills and New Frontier Bank.

The Details: The FDIC retained the remaining 60% and offered seven-year (7 Year), zero-interest (0%) financing to the Colony-Cogsville group, which reduces the venture’s upfront cash input to $218 million.

• This deal is the first public-private setup in which a minority-owned firm has taken a stake, albeit a small one, during this economic downturn.
• Cogsville, an African-American-owned firm, contributed $16 million to the $218 million investment, for a 7% stake in the portfolio.

Read the full overview, here ….

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Posted in Extend and Pretend, Modifications, FDIC, CMBS, Public-Private Investment Funds, Market Trending, Bankers, CMBX, Commercial Real Estate | One Comment