Santander Bank acquires 20% stake in $9bn multifamily real estate joint venture

Santander Bank, N.A., a major player in the banking sector, today announced the completion of a significant transaction with the Federal Deposit Insurance Corporation (FDIC). The Bank has acquired a 20% equity stake in a joint venture, involving a $9 billion portfolio of New York-based multifamily real estate assets retained by the FDIC following the collapse of Signature Bank.

Investment Highlights and Strategic Growth

The Bank’s investment of $1.1 billion in the joint venture comes at an attractive basis, and it will also service 100% of the assets in the portfolio. This move is a testament to Santander’s strength and expertise in the multifamily real estate sector, emphasizing its role as a leading multifamily bank real estate lender in the United States. The Bank’s multifamily real estate portfolio currently stands at $13.5 billion, and it holds an Outstanding Community Reinvestment Act (CRA) rating.

Deepening Market Presence in the New York Metro Area

According to Ana Botín, Executive Chair of Banco Santander, this transaction leverages the Bank’s considerable expertise and scale in the U.S. multifamily space. Tim Wennes, Santander US Country Head and CEO, highlighted the transaction’s role in leveraging industry expertise and deepening Santander’s franchise in the New York metro market.

Strategic Implications for Banco Santander

This joint venture with the FDIC aligns with Banco Santander’s strategic focus on the U.S. market. The portfolio includes rent-controlled and rent-stabilized multifamily loans, divided into three pools. The transaction is expected to be accretive starting in 2024 and will consume approximately two basis points of Santander Group CET1, with a payback anticipated within three years.

Advisory and Transaction Support

In this transaction, Santander received advisement from Wachtell, Lipton, Rosen & Katz, Davis Polk, and Chain Bridge Partners, ensuring a well-informed and strategic approach to this major investment.

Conclusion:

Santander Bank’s acquisition of a stake in the multifamily real estate joint venture signifies a major expansion in the U.S. housing market and reinforces its commitment to strategic growth in the real estate sector. This investment not only solidifies Santander’s position as a key player in the U.S. multifamily real estate market but also aligns with its broader strategic goals in the American banking industry.