Alternative asset manager Blackstone (BX) is continuing its aggressive push in commercial real estate (CRE) debt space, announcing the acquisition of nearly $2 billion in performing CRE loans from regional lender Atlantic Union Bankshares (AUB) on June 26, 2025.
What the deal entails
At the heart of the transaction is a portfolio of performing CRE loans backed by apartment buildings and neighborhood retail centers – assets initially originated by Sandy Spring Bank (SASR) and absorbed by AUB following its $1.6 billion acquisition. BX picked up the loans at a slight discount, reportedly around 7% below face value, reflecting continued CRE market pressure from elevated interest rates.
As part of AUB’s broader post-merger cleanup, the loans had been marked “held for sale” earlier this spring. While ownership now shifts to BX, AUB will continue servicing the loans, keeping borrower relationships intact.
Strategic motivations
For AUB, the sale reduces its CRE exposure as rising interest rates weigh on valuations, especially in the real and multifamily sectors. Offloading the loans de-risks the balance sheet while capturing fair market value. The proceeds will be used to pay down high-cost deposits and increase securities investments, strengthening liquidity and capital flexibility.
“The loan sale transaction reduces our CRE concentration and frees up capacity for potential future growth,” said AUB CEO John Asbury in a press release.
For BX, the deal aligns with its ongoing strategy to acquire discounted performing CRE debt through its $76 billion Blackstone Real Estate Debt Strategies platform. The firm, which recently raised an $8 billion debt fund, has invested around $20 billion in similar deals since 2023, including large portfolios from Signature Bank (SBNY) and Deutsche Pfandbriefbank (PBB). The acquisition reinforces BX’s role as both a liquidity provider to banks offloading CRE risk and source of a yield-driven assets for investors.
Market context & analyst view
Driven by rising interest rates and declining office demand amid the shift to remote work, the CRE market is experiencing one of its sharpest downturns since World War II. Regional and community banks, which hold a large share of CRE loans, are increasingly selling these assets at discounts to reduce risk and free up capital.
AUB’s recent loan sale highlights how bank mergers often lead to asset repositioning, a trend analysts expect to continue amid favorable regulatory support for consolidation. Following the transaction, Raymond James (RFJ) reaffirmed a “Strong Buy” rating on AUB, praising its strategic execution.
“We view the sale as a positive, as completion of the transaction at a reasonable price has been a question for some.”
What does this mean going forward?
The sale reduces AUB’s CRE exposure, boosts liquidity, and creates capacity for new lending. For BX, the acquisition underscores its ability to scale its CRE debt platform. Analysts expect this type of transaction to accelerate as consolidation continues and regulatory conditions remain favorable.
BX’s near-$2 billion purchase underscores its growing CRE debt footprint and illustrates how banks like AUB are recalibrating post-merger. The deal delivers clear benefits for both sides: liquidity and balance sheet relief for AUB, and discounted, yield-focused assets for BX.
