In a bid to offload the collapsed Signature bank's real estate loans, regulators are in final discussions to declare Blackstone's offer as the one that brings the lowest costs to the agency, according to sources familiar with the matter. The Federal Deposit Insurance Corporation (FDIC) has been marketing loans backed by various types of properties, including retail, industrial, office, and apartment buildings, after seizing the failed bank in March.

While the exact terms of the deal are still being worked out, it is known that Blackstone is considering partnering with Rialto Capital to help service the loans. However, the possibility of another bidder emerging victorious or the loan pool being divided among different suitors cannot be ruled out at this stage.

The FDIC has been actively seeking to offload approximately $33 billion of Signature's real estate loans, with a particular focus on those associated with apartment landlords in New York City. Interestingly, loans backing rent-stabilized or rent-controlled units are not part of the Blackstone deal. This move by the FDIC highlights the agency's strategic approach to mitigating potential risks and ensuring the best possible outcome in terms of recovery.

The commercial real estate sector has been facing mounting pressure due to rising borrowing costs, resulting in reduced property values and lackluster transactions. With the market experiencing a significant slowdown, investors have been closely monitoring the Signature sale as an indication of pricing trends.

The bidding process has attracted interest from various finance companies, including Starwood Capital Group and Brookfield Asset Management Ltd. While it remains undisclosed how many bidders have sought out each portfolio, it is known that several companies were planning to team up with other firms to submit joint offers, highlighting the competitiveness of the market.

The FDIC has enlisted the expertise of Newmark Group Inc., led by Doug Harmon and Adam Spies, to oversee the sales process. The brokerage firm, however, refrained from providing any comments on the matter.

As the negotiations for the sale of Signature's real estate loans near their conclusion, industry observers eagerly await the final outcome. Given Blackstone's potential bid and its reputation as a prominent player in the real estate investment space, there is anticipation for this deal to provide a valuable benchmark for discerning investors.