New York Community Bancorp Inc. has been looking to shed problem commercial real estate from its books after last week reporting a surprising $185 million loss relating to a pair of loans as part of its fourth-quarter earnings results.
The lender has offered investors a chance to bid on a $22.4 million mortgage backed by three five-story walk-up apartment buildings in Washington Heights, a neighborhood in northern Manhattan, according to details of the offering viewed by MarketWatch.
The debt backs mostly rent-regulated apartments and affiliated mixed-use space. The mortgage matured in early January, with the full amount of the debt now due, plus interest at a 20% default rate, according to the offering.
Other landlords in the neighborhood who are subject to New York City’s rent-regulation laws, which were strengthened in 2019, have seen property values tumble by an estimated 50%, according to Bloomberg News.
New York Community Bancorp
NYCB
didn’t respond to requests for comment for this article.
Efforts by the bank to tackle its exposure to problem real-estate loans come as its stock has dropped by more than 60% so far this year.
The lender has a large exposure to rent-regulated multifamily properties in New York City, about a $1.8 billion office-building exposure in the city and about $250 million to $300 million in maturities in the next few years, according to Deutsche Bank researchers.
Pressures facing the bank are reigniting fears about regional banks and their commercial real-estate exposure. Treasury Secretary Janet Yellen told lawmakers on Tuesday that she was concerned about U.S. commercial real estate, saying that some institutions could be “quite stressed,” while also saying the challenge looks manageable.
Landlords have been reeling from slumping property prices and higher borrowing costs since the Federal Reserve in 2022 began dramatically raising interest rates to quell high inflation.
Many regional banks have responded by trying to quietly shed exposure to problem commercial real estate. That activity has picked up since the collapse of Silicon Valley Bank and Signature Bank last March and JPMorgan Chase & Co.’s
JPM
takeover of First Republic Bank, which deeply unsettled markets.
Late Tuesday, Moody’s Investors Service downgraded New York Community Bancorp’s credit by two notches into speculative-grade or “junk” status.
“We took decisive actions to fortify our balance sheet and strengthen our risk management processes during the fourth quarter,” Thomas Cangemi, New York Community Bancorp’s president and chief executive officer, said in a statement following the downgrade.
Cangemi also said that the bank has ample liquidity and has been growing its deposits and that the downgrade wasn’t expected to have a material impact on the lender’s contractual arrangements.
Sales of assets, even at a discount, can sometimes help banks get ahead of greater problems facing the industry, loan buyers said. But they also expect commercial-real-estate lenders to endure a challenging few years, especially as a wall of old debt comes due at a time of higher interest rates.
See: ‘No one is throwing good money after bad.’ Why 2024 looks like trouble for commercial real estate.
Mariner Wealth Advisors, one of the nation’s most acquisitive wealth managers, is buying two institutional consulting firms with a combined $104 billion in assets under advisement to form the nucleus of a new unit catering to institutional clients.
The acquisitions will nearly double Mariner’s AUA, which the firm said was $122 billion at the end of last year.
Mariner has agreed to buy Winter Park, Fla.-based AndCo Consulting and Covington, Ky.-based Fourth Street Performance Partners in a simultaneous transaction. It plans to merge the two firms, which serve government, corporate, and nonprofit institutional clients.
Mariner said it expects to close the transaction in early April but didn’t disclose deal terms and declined to provide an AUA breakdown of the firms it is acquiring.
The two firms will operate under a new Mariner Institutional brand, according to Mariner.
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“The complementary nature of our clients and services will support our joint growth and offer existing clients and prospects additional services that will help enhance the overall client outcome,” said Marty Bicknell, CEO and president of Mariner Wealth Advisors.
The acquired firms will retain their 100 professionals and continue serving clients out of locations in Covington, Ky., Winter Park, Fla., Chicago, Dallas, Detroit, Pittsburgh, Cleveland, and Reno, Nev.
Founded in 2006 and based in Overland Park, Kan., Mariner has grown into one of the nation’s largest registered investment advisor firms by aggressively recruiting advisors and acquiring other firms. The firm had $65.9 billion in assets under management, according to its most recently filed Form ADV with the Securities and Exchange Commission.
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Mariner is backed by private-equity firm Leonard Green & Partners.
Write to Andrew Welsch at andrew.welsch@barrons.com
Published: Jan. 23, 2024 at 7:51 a.m. ET
By Dominic Chopping
STOCKHOLM–Intrum said late Monday that it will sell the majority of its investment portfolio to affiliates of Cerberus Capital Management for 8.2 billion Swedish kronor ($783.8 million).
The Swedish debt collector said the deal will see a portfolio of mainly unsecured assets acquired by an entity in which Cerberus will…
By Dominic Chopping
STOCKHOLM–Intrum said late Monday that it will sell the majority of its investment portfolio to affiliates of Cerberus Capital Management for 8.2 billion Swedish kronor ($783.8 million).
The Swedish debt collector said the deal will see a portfolio of mainly unsecured assets acquired by an entity in which Cerberus will hold a 65% stake and Intrum will hold 35%.
“This transaction is an important step that will allow us to de-lever our balance sheet, while maintaining exposure to the asset,” said Intrum Chief Executive Andres Rubio. “The transaction is an important step to a more capital-light business model – reduced balance sheet intensity while leveraging our servicing capabilities and increasing our highly valued recurring-servicing income.”
Net proceeds will be used to reduce debt upon completion, expected during the first half of 2024.
Write to Dominic Chopping at dominic.chopping@wsj.com