JP Morgan Chase Buys $3.5B Loan Portfolio from Citibank

By Barbra Murray, Contributing Editor

 JPMorgan Chase has enhanced its $36 billion commercial term lending business portfolio by nearly 10 percent in one fell swoop with the acquisition of a $3.5 billion portfolio of 3,800 performing multi-family and commercial real estate loans from Citibank. Terms of the transaction, which closes immediately, are being kept close to the vest.

The deal represents a vote of confidence in the multi-family sector, a favorite of investors and the capital markets. Much of the portfolio consists of loans on rental apartments in California, Illinois and New York that have demonstrated solid credit performance. “We are excited about the opportunity to provide additional credit for multi-family properties in our core markets and broaden our relationship with these new clients,” Todd Maclin, CEO of Chase Commercial Banking, noted in a prepared statement. “We know how important rental apartments are to the health of a community.”

 The multi-family-heavy group of assets is consistent with the makeup of Chase’s commercial term lending portfolio, which consist of 80 percent multi-family loans.

 Given the current economic climate, Chase may have gotten quite a deal on the purchase. But whether the financial giant acquired its new portfolio at a significant discount, few entities have the means to acquire a multibillion-dollar loan portfolio. In March, real estate investment and services firm Kennedy Wilson joined with a venture partner to acquire a $342 million commercial real estate loan portfolio from a major regional bank. Also in March, Starwood Property Trust closed on a $503 million portfolio of 20 performing commercial mortgages from TIAA-CREF for $512 million in cash.