We advised Rialto Capital on the joint venture

Davis Polk advised Rialto Capital in connection with a newly formed joint venture with the Federal Deposit Insurance Corporation. Funds managed by Rialto Capital, together with Blackstone Real Estate Debt Strategies, Blackstone Real Estate Income Trust and Canada Pension Plan Investment Board through its subsidiary CPPIB Credit Investments III Inc., acquired a 20% equity stake with 50% financing for $1.2 billion in the venture, which holds a $16.8 billion senior mortgage loan portfolio retained in receivership following the failure of Signature Bank. The FDIC is maintaining an 80% ownership stake in the portfolio.

The commercial real estate loan portfolio comprises more than 2,600 first mortgage loans on retail, market rate multifamily and office properties primarily located in the New York metropolitan area. Rialto Capital will act as the loan servicer and operating partner, while Blackstone will be the lead asset manager of the portfolio.

Founded in 2009, Rialto Capital is an integrated real estate investment management, asset management and special servicing platform.

The Davis Polk corporate team included partner Leor Landa, counsel Ajay B. Lele and Benjamin Milder and associates Jerry O’Young, Dylan Major and Caroline R. Zhang. Partner Ethan R. Goldman and associate William Liang provided tax advice. All members of the Davis Polk team are based in the New York office.