Cerberus Acquires Multifamily Loan Book with Heavy Rent-Regulated Exposure

Cerberus Capital Management has acquired a $1.3-billion loan book with heavy exposure to rent-regulated apartments in New York City, Bloomberg News reported. The seller was OceanFirst Financial Corp., which priced the loans at about 92 cents on the dollar.

With about $736 million of the $1.3-billion portfolio tied to rent-regulated units, the Cerberus acquisition represents one of the largest loan sales in New York’s rent-stabilized sector since 2019 state legislation capped the ability of landlords to raise rents. More recently, the Rent Guidelines Board under New York City Mayor Zohran Mamdani enacted a two-year freeze on increases for tenants signing renewal leases in rent-regulated apartments.

OceanFirst inherited the apartment loan portfolio with its acquisition of Flushing Financial Corp. in June, then moved quickly to offload the loan book, reported Bloomberg. Regional banks have sought to reduce their exposure to risky apartment loans in view of rising landlord costs and regulatory challenges.

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