In a notable move marking its expansion in the United States, Spanish banking giant Santander announced on Wednesday that it had acquired a 20 percent stake in a significant U.S. real estate portfolio. The deal, valued at $1.1 billion, was signed with the Federal Deposit Insurance Corporation (FDIC), which will hold the remaining 80%. This joint venture is a strategic step for Santander to strengthen its presence in the US multifamily real estate sector.
The $9 billion portfolio is comprised of New York-based multifamily real estate assets and was previously under FDIC control following the collapse of Signature Bank earlier this year. This acquisition is more than just a financial investment for Santander. The bank will also undertake maintenance services for all assets within this portfolio, demonstrating its operational commitment to this business.
Santander expects the transaction to start contributing positively to its finances from 2024 onwards. The transaction is expected to consume approximately 2 basis points of Santander Group’s CET1 capital and is expected to be redeemed within three years.
Ana Botín, Executive Chairman of Santander, emphasized the importance of this transaction, saying that Banco Santander is already a major player in the US multifamily sector, with a portfolio of $13.5 billion. did. This new acquisition further strengthens Santander’s commitment to this sector and highlights the US as a strategic market for the Spanish financier.
Interestingly, Botín said just last month that while Santander does not need acquisitions for profitable growth in the coming years, it is still open to considering smaller follow-on acquisitions. The deal is in line with Santander’s broader strategy to expand its footprint in the US market. At the Reuters NEXT conference in New York in November, Botin laid out plans to further increase the company’s corporate banking presence in the United States.
The portfolio involved in this joint venture consists of three pools of rent-controlled and rent-stabilized multifamily mortgages. Santander’s entry into this sector demonstrates the company’s strategic approach to investing in stable, regulated real estate assets.
In executing this transaction, Santander retained the advisory services of Wachtell, Lipton, Rosen & Katz, Davis Polk and Chain Bridge Partners to ensure a strong legal and strategic framework for this important investment.
This joint venture not only marks Santander’s significant expansion in the US market, but also demonstrates the bank’s confidence in the stability and potential of the US multifamily real estate sector. By integrating these assets into its existing portfolio, Santander will strengthen its position as a major international player in the real estate investment field.