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Blackstone has agreed to purchase $2 billion in commercial real estate (CRE) loans from Atlantic Union Bankshares at a discount of approximately 7%, paying around $0.93 per dollar of face value.
Deal Overview
The portfolio includes performing loans backed by multifamily and neighborhood retail properties. These loans were originally issued by Sandy Spring Bank, which Atlantic Union acquired in April 2025. Though current on payments, the loans were originated before the Federal Reserve began raising interest rates in 2022, resulting in a decline in market value.
Strategic Timing
Atlantic Union leveraged the merger with Sandy Spring to mark the loans to market, avoiding a realized loss on the sale. Proceeds from the transaction will be used to invest in higher-yielding assets, reduce funding costs, and support new loan origination.
Blackstone’s Approach
The deal aligns with Blackstone’s $20 billion strategy focused on acquiring discounted, performing CRE debt. Its $76 billion real estate debt platform is actively capitalizing on dislocations in regional bank lending, acquiring assets where traditional lenders are pulling back.
Market Implications
With regional banks still holding a significant share of U.S. CRE debt, continued pressure from rising rates and regulatory scrutiny—especially post-merger—may drive further loan sales at discounts, presenting ongoing opportunities for well-capitalized buyers like Blackstone.
