On December 14, 2023, Blackstone Real Estate Debt Strategies (BREDS), Blackstone Real Estate Income Trust (BREIT), Canada Pension Plan Investment Board (CPP Investments), and Rialto Capital formed a joint venture with the Federal Deposit Insurance Corporation (FDIC) to acquire a 20% equity stake in a $16.8 billion USD senior mortgage loan portfolio (approximately C$22.7 billion). The venture followed the collapse of Signature Bank, with the FDIC retaining 80% ownership and providing 50% financing for the venture. The joint venture's investment amounted to $1.2 billion USD (approximately C$1.6 billion).

The portfolio included over 2,600 first mortgage loans, primarily on retail, multifamily, and office properties in the New York metropolitan area. Approximately 90% of the loans were fixed-rate with strong debt service coverage.

Blackstone acted as the lead asset manager, and Rialto Capital was appointed as the loan servicer. The deal highlighted Blackstone’s expertise in real estate credit and CPP Investments’ focus on capital-constrained sectors.

Jones Lang LaSalle served as the real estate advisor, while legal counsel included Simpson Thacher & Bartlett LLP, Gibson Dunn & Crutcher LLP, Ropes & Gray LLP, Davis Polk & Wardwell LLP, and Bilzin Sumberg Baena Price & Axelrod LLP.