Square Mile Capital Management and The Blackstone Group have closed a deal to acquire a $385 million portfolio of hotel loans from the US banking regulator, the Federal Deposit Insurance Corporation.
The deal sees the two New York-based firms acquire a pool of first mortgage loans originated by the failed Atlanta bank, Silverton Bank, and secured by 45 full-, limited- and select-service hotels. The firms declined to comment on financial details, but they are believed to have paid around 80 cents on the dollar for the portfolio, according to people familiar with the matter. Square Mile will service the portfolio, the bulk of which is performing, the statement added.
For Square Mile, the deal marks a return to Silverton’s loan book after it acquired a 40 percent stake in a portfolio of 57 construction and hospitality loans being sold off by the FDIC last June. Square Mile, led by Craig Solomon and Jeff Citrin, fought off 214 bids from 37 different groups in the auction last year, acquiring the 40 percent interest for $68 million, equivalent to 82 cents on the dollar. The FDIC retained the remaining 60 percent interest.
The latest Silverton deal sees Square Mile and Blackstone acquire the full loan portfolio, rather than a 40 percent or 50 percent stake.
The banking regulator has closed only a handful of structured sales this year, with Colony Capital snapping up two loan portfolios in January and investing roughly $96 million of equity. The Los Angeles-based firm purchased 50 percent stakes in the two portfolios of 1,505 residential and commercial loans, which had a face value of $817 million, for 23.6 cents on the dollar. The transaction was the fifth structured loan portfolio Colony has acquired from the FDIC, with the firm's first deal closing in January last year.