Brookfield Buys $925M Regional Bank CRE Loan Portfolio

As reported in Bisnow, Brookfield Asset Management, a Toronto-based firm with approximately $1T in global assets, continued its robust acquisition streak by purchasing Valley National Bank’s $925M CRE loan portfolio.

Deal Details

This massive transaction allows Brookfield (BN) to expand its real estate credit market presence while providing flexible capital solutions to institutional lenders.

“This acquisition demonstrates our ability to step in as an alternative lender to provide creative, flexible capital solutions,” said Bill Powell, managing partner for Brookfield’s credit business.

The acquired portfolio comprises high-quality, performing loans, though further details on the asset mix remain undisclosed. Valley National Bank will maintain customer-facing responsibilities for the debt, ensuring a seamless transition for borrowers.

Strategic Shift

For New Jersey-based Valley National Bank, the sale is a step toward meeting regulatory expectations around commercial real estate exposure. Amid growing concerns of systemic risks tied to loan extensions, Valley offloaded the loans to focus on balance sheet optimization.

The sale will result in a slight loss for the bank in Q4, as $823M of the loans had already been marked for sale. Another $102M in loans have been newly identified for sale, reflecting Valley’s broader strategy to de-risk its portfolio.

Buying Spree

The loan acquisition is part of Brookfield’s $3B spending spree in 2024. The firm recently paid $845M for eight Sun Belt multifamily properties from Blackstone REIT (BSTT) and $1.3B for a 15 MSF industrial portfolio in July.

Brookfield’s executives remain optimistic about the real estate market, with President Connor Tesky forecasting a robust recovery in the office sector and a broader market rebound. Tesky also expressed confidence in Brookfield’s ability to double its asset base to $2T by 2029.

Looking Ahead

This transaction underscores Brookfield’s strategic focus on high-quality, scalable investments in a volatile market. 

For Valley National Bank, it marks a prudent step in reducing exposure to commercial real estate amid rising scrutiny, signaling a broader trend among regional banks to mitigate risks in a shifting regulatory landscape.